Partnership

Question 1

What is a key advantage of a partnership in terms of expertise?

Answer 1

The business owners may have wider expertise and can share ideas

This allows for more informed decision-making and innovation.

Question 2

What is a potential disadvantage regarding decision-making in a partnership?

Answer 2

Decisions made by one partner can affect all partners

This can lead to conflicts and disagreements.

Question 3

What happens to a partnership if a partner leaves?

Answer 3

The business no longer exists

This highlights the dependency on each partner’s involvement.

Question 4

How is financial risk managed in a partnership?

Answer 4

The risk is shared

This can make it less burdensome for individual partners.

Question 5

What advantage does a partnership have in raising finance?

Answer 5

Can be easier to raise finance to establish or grow the business

This is often due to combined resources and creditworthiness.

Question 6

How are profits handled in a partnership?

Answer 6

The profits are shared

This incentivizes partners to work collaboratively towards success.

Question 7

What is a unique aspect of financial information in a partnership?

Answer 7

The business’s financial information is kept private

This can be beneficial for confidentiality and competitive advantage.

Question 8

True or False: Partnerships can lead to disagreements between partners.

Answer 8

True

Disagreements can arise from differing opinions or business strategies.