FUN WORLD

In simple terms, a business partnership accounts for a relationship that exists between two or more individuals who undertake and carry on a business. Partners contribute funds, property, skills, and labor, and are expected to have an equal share in both the profits and losses made by the business. While partnerships are easy to establish, there are also many positive and negative aspects they involve later on. It is always advantageous to learn what is the advantage and disadvantage of partnership business. Hence, I have compiled the essential points which talk about the the advantages and disadvantages of partnerships. Check them out:

Advantages of Partnership

• Simply put, more than one owner of a business introduces more money to help starting business.
• There is a combination of talents, skills, and experience with the involvement of new partners, which may help in increasing the profits and cost-effectiveness of the business.
• A partnership brings about better administration and financial planning which is otherwise difficult in case of a single owner of the business.
• It is easy to expand the business with new partners being involved, since there is no hassle of managing the entire business on one's own.
• All partners have an equal say in the matters of financial management which fosters them to work whole-heartedly for the betterment of their company.
• There is lesser room for rash decisions as the decision-making process is the field of performance for all partners.
• Post the payment of super tax to the government, the profits made by the company are equally divided among the partners. It is then that they can pay tax to the government on the shares of profit they've received.
• In case of a loss, partnership renders moral support, thus enabling for an even more insightful point of view.

Disadvantages of Partnership

• Surprisingly, a partnership is not necessarily a legal entity, and is identified only for the purpose of tax law.
• The existence of a partnership comes to an end with demise, incapacity, lack of funds, or even retirement of a partner. Moreover, dissolving a partenership is likely for partners in case of discontent.
• There are many instances when one partner is over-ruled by another as every partner has an equal say in important decisions.
• Even the simplest of arguments can, sometimes, turn into major disagreements between partners. As a result, all partners are bound by allegiance made by one, even if its disagreeable by all.
• Even if one of the partner is responsible for loss, all the partners are collectively liable for the aftermaths of the company. Many a times, partners are asked to clear the debts from their personal assets in accordance with the decision made by all.
• It is forbidden for a partner to transfer a share or segment of the company to outlanders without the approval of other partners, which may become inconvenient for that partner to resign from the company.
• In case of unlimited liability partnership, partners could lose all of their personal assets in case of bankruptcy.