Partnership Flashcards
What is a partnership
A partnership is a business that is jointly owned and controlled by more than one person.
What are the advantages of a partnership
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
What are the disadvantages of a partnership?
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)
What is a deed of partnership?
This is a legal document setting out the terms and conditions under which that particular partnership would operate.
What does a deed of partnership contain?
➢ 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
