Partnership Business Advantages and disadvantages are provided in this article and we hope you find it helpful and informative.
Advantages and disadvantages of partnership
Advantages of general partnership
Advantages of Partnership:
1. Ease of formation
It is very easy to form a Partnership. Little or no expertise is required when forming it. All that is required is just the business idea and the terms and conditions properly put into writing.
2. Fewer regulations
Just like the sole proprietorship, when your partner is in a business, you are faced with little or no government regulations.
Read Also: 10 Businesses With Zero Capital Demand
3. Greater expertise
‘Two heads are better than one when your partner in business, you open the business’ opportunity to greater expertise.
What a person will see in the business may not be what another will see. While taking a decision, thinking as a team will help minimize the mistakes.
4. Additional support
Businesses sometimes face great obstacles and when this happens, a sole proprietor may have limited support.
For instance, if you have just been supplied with some raw materials and you need to carry it to your business place with the help of a family or friend, your own family and friends may not be within reach but that of your partner will definitely be within reach.
Read Also: How to Start Your Own Business in Nigeria
5. More profit
When two persons come together to put in their money for business purposes, the money becomes twice as much more than the sole proprietor and you will realize or come to terms that every business when invested duly into will yield more profit than the one that receives less investment.
Partnership is not taxed
In some regions, a business that is operated as a partnership is usually not taxed.
Disadvantages of Partnership
1. Unlimited liabilities
When one is engaged in a general partnership, the extent to which or her loss is usually not limited. Should the business close down, the person shares all the losses accrued by the business?
2. Lack of Control
Despite the terms and conditions, since there are two or more bosses, one may simply decide to become over-demanding and uncontrollable and this is not healthy for the growth of the business.
3. Transferring ownership is impossible
In cases where there is a death of one of the partners, except otherwise stated in the terms of the agreement, the transfer of partnership right is not readily possible as the living partner may decide to keep to himself all of the business’ assets and liabilities.
Death of a partner terminates partnership!