2C- partnership Flashcards
What is the ownership in formation of partnerships
owned and formed and managed by 2 or more people. (friends associates or with similar related qualifications)
How are the decisions made in partnerships
Decisions are made jointly by partners
Is there a little distinction between business and partners (unlimited liability)
No legal distinction between business and partners
What is this difference in the source of finance compared to soul traders
Most recent finance compared to soul traders
what are sleeping partners
A person who provides some of the capital for a business but doesn’t take an active part in managing the business
What is the difference in the accountability and responsibility compared to a sole trader
greater accountability comparedto sole trader (knowing exactly the rights responsibilities and disagreement consequences included on the deed partnership)
what is the difference between sole trader and partnerships in regards to continuity
Business continuity and stability is greater than sole trader and partnerships
Are profits shared and partnerships
Profits are shared but not always equally
Define partnership
A private business run by two or more individuals who form a partnership, each person contribute money and resources as well as sharing the responsibilities of managing a business. A partnership has a deed of partnership stating the responsibility of each partner. It involves the presence of a silent or sleeping partner who does not make decisions, merely giving money to the business and earning the profit.
What are the advantages of a partnership
different skills and qualifications may have more efficient production specialization
It brings more expertise more sources of finance compared to sole trader
greater stability and low risk
more chances continuity and stability is greater than sole trader
What are the disadvantages of a partnership
Conflict between partners me existence break up of a partnership hence breakup of partnership may happen
Shared profits
No full control over the business
less source of finance compared to other companies (privately and publicly held companies)
no legal distinction between the business and partners (unlimited liability)
