Partnerships Flashcards
What is a partnership?
It is
Who owns the business?
The partners own the business
Number of owners?
Between 2 and 20 partners (maximum)
Who controls the business?
The partners control the business
Who finances the business?
The partners finance the business
What liability is there?
There is unlimited liability for the partnership
Who keeps the profit?
The partners divide the profit between themselves
How is the business
established?
The partners involved are advised to write a legal document called a Deed of Partnership, which sets out the rules of the partnership
Continuity – what happens
if the owner dies?
The partnership dissolves under that name
Advantages:
Shared workout
More sources of finance than sole trader
Share skills
Holidays are covered
Disadvantages:
May disagree with other partners
Unlimited liability
Liable for the actions of the other partners
Share the profit with others
What is a Deed of Partnership?
A Deed of Partnership is an agreement between partners that sets out the rules of the partnership, such as how profits will be divided and how the partnership will be valued if someone wants to leave
