partnerships ( private sector )

Question 1

what is a partnership?

Answer 1

a partnership is a groups of people or an association between 2-20 people who agree to own and run a business together

Question 2

what is a partnership agreement?

Answer 2

a partnership agreement is a written and legal agreement between the business paretners in order to avoid conflict between them

Question 3

what should a partnership agreement contain?

Answer 3

• capital invested by each partner
• tasks to be undertaken by each partner
• the way in profits would be shared
• how long the partnership would last
• agreement for absence, retirement and how new partners should be admitted

Question 4

3 advantages of a partnership business

Answer 4

• easy to set ups partnership
• the responsibilities of running the business would be shared
• more capital can be invested into the business which would allow expansion of the business

Question 5

3 disadvantages of a partnership business

Answer 5

• partners do not have limited liability
• there is not continuity if one of the partner dies, so does the contract
• partners can disagree on important business decisions and consulting all partners would take time

Question 6

what are limited partnerships?

Answer 6

in a limited partnership, the partners will benefit from limited liability but they do not take part in running the business. they are called “sleeping partners”.