Partnerships Flashcards
What are partnerships?
They are businesses that are owned and controlled by a minimum of 2 people, but a maximum of 20
What can partnerships benefit from?
Shared expertise (knowledge of their job)
How much say do the employees at a partnership have?
They all have equal say in the decision-making process (unless the deed of partnership says otherwise)
What does the deed of partnership show?
It shows :
The money put into the business
Roles and responsibilities of all partners
How the agreement can be ended
Advantages of operating as a partnership are …
Control of the business can be divided between partners as they share the responsibility and risk
They are able to take time off due to illness and for holidays as responsibilities are shared between partners
More capital is invested into the business
It is easy and cheap to set up
Deed of partnership is then drawn up
Specialization as each partner might have a different skill to be used by the business
Disadvantages of a partnership are….
Profits are shared amongst all owners
Dividing control may cause disputes between partners
There is unlimited liability, meaning that any debt will have to be paid off, and possessions might have to be sold
