PARTNERSHIP BUSINESS STRUCTURE- ADVANTAGES/ DISADVANTAGES  

 

ADVANTAGES 

Has more than one business owner, therefore more skills, experience, management expertise available.
Relatively low startup costs.
Partnership losses go to partners and can be offset against other personal income.
Privacy of affairs- Financial Statements donít have to be released to the public and donít have to be audited.
Limited outside regulation
Easy to change the business structure.
Can raise finance by introducing another partner who provides this rather than have to go to lending institution.

 

 

  DISADVANTAGES   

All partners are jointly and severally liable for the debts of the partnership-   this means that one partner is liable for debts another incurred on behalf of the partnership.  
No protection for partnerís personal assets, which can be seized to satisfy partnership debts.
Divided authority- more than one person making the business decisions.
Lack of continuity- when a partner pulls out the business ceases.
Limitation on size.
Friction between partners.
Not as easy to obtain finance as companies- banks may require personal guarantee and security over personal assets.
May require professional advice when start- advisable to have partnership agreement if not man and wife partnership.
May be difficult to sell off the partnership business and get good price as it may be the case that a lot of goodwill is through personal effort and relationship with customers and partners.

 

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