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What is Partnership?
Features of Partnership Form of Business
- It can be formed by more than one but not more than twenty persons.
- The risks of the business are jointly home by all the partners except the dormant partner.
- The liability of all partners except the dormant partner is unlimited.
- It affords wider scope of business decision making.
Advantages of Partnership
- It can obtain more capital than a sole proprietor.
- There is a close relationship between partners and their workers and customers.
- Privacy – Its accounts are not open to public inspection.
- Decisions are jointly taken by the partners.
- There is specialization in the business management as the business is formed by two or more persons.
- There is also a wider spread of business risks.
Disadvantages of Sole Proprietorship
- Unlimited liability – the liability of partners in the business is unlimited.
- The death of a member may bring about the end of the business.
- Any dispute among members may lead to the end of the business.
- The possibility of a disagreement over the introduction of a new partner may deny the business of more capital and expertise.
- Limited capital resources due to its inability to raise funds through the Stock Exchange.