Partners divide responsibility for management and liability, as well as the shares of profit or loss according to their internal agreement. Equal shares are assumed unless there is a written agreement that states differently.
| General Partnership Advantages:
| General Partnership
Disadvantages:
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| ü Partnerships are relatively easy to establish.
ü With more than one owner, the ability to raise funds may be increased, both because two or more partners may be able to contribute more funds and because their borrowing capacity may be greater.
ü Prospective employees may be attracted to the business if given the incentive to become a partner.
ü A partnership may benefit from the combination of complementary skills of two or more people. There is a wider pool of knowledge, skills and contacts.
ü Partnerships can be cost-effective as each partner specializes in certain aspects of their business.
ü Partnerships provide moral support and will allow for more creative brainstorming.
| ü Business partners are jointly and individually liable for the actions of the other partners.
ü Profits must be shared with others
ü Since decisions are shared, disagreements can occur.
ü The partnership may have a limited life; it may end upon the withdrawal or death of a partner.
ü A partnership usually has limitations that keep it from becoming a large business.
ü You have to consult your partner and negotiate more as you cannot make decisions by yourself.
ü A major disadvantage of a partnership is unlimited liability. General partners are liable without limit for all debts contracted and errors made by the partnership.
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(The text is borrowed and modified from http://www.how-to-start-a-business-guide.com/partnership-advantages.html: as of 27 December 2011)
Task 8. Project work. Imagine that you just won 100 000$ in the lottery. Your lifetime dream was to open your own publishing company. Now you have everything for doing this. Which form of business would you choose: sole proprietorship or partnership? Explain your choice. You can use the information from Task 8 (You have 10 minutes for this task).
