Partnership

Question 1

What is a partnership?

Answer 1

A partnership is a business that is jointly owned and controlled by more than one person.

Question 2

What are the advantages of being in a partnership?

Answer 2

More than one source of capital
Partners can specialise, which means concentrating on an area of expertise
The workload and responsibilities are shared Quicker and easier to set up than a limited company

Question 3

What are the disadvantages of being in a partnership?

Answer 3

The profits have to be shared between the partners
There can be disagreements between the partners
The partners still have unlimited liability. The partners should produce a DEED OF PARTNERSHIP (although not compulsory)

Question 4

What is a deed of partnership?

Answer 4

This is a legal document setting out the terms and conditions under which that particular partnership would operate.
It contains:

Question 5

What does a deed of partnership include?

Answer 5

Names of the partners
How much capital each partner has contributed
How profits will be shared
How important decisions are made.
What happens if a partner wants to retire.