Partnership Flashcards
Name of partnership
No legal requirement regarding the name of the business
Number of owners for partnership
2 or more
Management for partnership
Partners shares responsibilities and they are involved in decision making
Capacity for partnership
Expansion is possible because more partners join the partnership
Legal requirements for partnership
No legal formalities to start only a written partnership agreement is a requirement
Liability for partnership
Partners have unlimited liability and are jointly and separately liable for the debts of the company
Legal personality
Partnership has no legal personality
Continuity for partnership
Theres no continuity because if there are two partners and one dies the business cant continue as a partnership
Capital for partnership
Partners combine capital and may also borrow capital from financial institutions
Profits Sharing
Profits are shared according to the partnership agreement
Taxation
Partnerships don’t pay taxes, partners pay personal income tax
Advantages of partnership
Relatively easy and cheap to establish
Easier to get credit
All benefit from profit
Disadvantages of partnership
Unlimited liability
Partners may disagree
Decision making takes time
