1.4.1: partnerships

Question 1

limited partnership (sleeping partner)

Answer 1

where 1 partner does not play an active role in the business.

Question 2

partnerships

Answer 2

2 or more people running a business with the aim of making a profit.

Question 3

deed of partnership

Answer 3

a legal document that outlines the rules by which a partnership is run.
- shows initial investments, how profits will be split, partners, etc.

Question 4

limited liability partnerships (LLPs)

Answer 4

mix of partnerships and Ltds

INCORPORATED & LL

must submit copies of their accounts to the registrar of companies (available for public inspection)

all income regarded personal income + taxed accordingly

Question 5

cons of partnerships

Answer 5

• unincorporated and unlimited liability (excl. LLPs)
• profits have to be shared
• if 1 partner leaves, the business collapses
• deed of partnership is costly to write up

Question 6

pros of partnerships

Answer 6

• relatively easy to set up
• shared decision making/risk
• allows family ownership + wider expertise
• share ideas
• accounts can stay private