Partnership

Partnership

1. Disadvantages

   • It takes longer to make decisions
     • because fellow partners need to be consulted
   • Unlimited liability
     • can result in personal assets of partners being at risk
   • No continuity
   • Partners bind their fellow partners through their actions
   • Dishonesty of one partner to further the interest may make all parties guilty

2. Advantages

   • Easier to raise capital
     • since more people contribute than with the sole proprietorship
   • No formal legal procedure required
   • More owners to share responsibilties
   • Partners may contribute a skill, ability or asset
   • More skills and abilities result in greater energy
   • Easier to get loans
     • because more than one person will be held liable to repay them

3. Characteristics

   • A minimum of 2 partners
     • may enter into a written or oral agreement
   • Has no name requirement
   • Is not a legal person
   • Liability of partners is unlimited
     •  and their personal assets may be attached by creditors
   • Lacks continuity
     • and ends when partner dies, retires or a new partner joins the business.
   • No legal formation procedure
     • and partner simply needs to obtain trading licence.
   • Not a legal entity