BUSINESS

Creating, Financing, and Marketing a Business

Creating, Financing, and Marketing a Business

Identify The Pros And Cons Of The Partnership As A Form Of Ownership.

Partnership is merely different from sole proprietorships because partnership is an entity that is legally separate from the partners themselves. However, the profits and losses are shared through a predetermined ratio that is decided before the commencement of the partnership deed. The shared ownership concept that characterizes a business model gives it certain unique pros and cons (Patricia, 2010).

Pros of Partnership

In business setting, partnership is relatively easy to determine.

One of the prime advantages of partnership is generating funds for business. With more than one owner, the capability to increase resources may be improved because higher number of partners will be able to lead more resources and because their credit potential may be greater.

Also, in many organizations potential workers may be given incentives to become partners in company's share as a motivational factor.

A partnership deed may benefit from the collaboration of related abilities of two or more people. There is a greater share of understanding, abilities and associates.

Partnership is also cost-effective because each partner focuses on certain factors of their business.

Lastly, it provides significant assistance and moral support for more innovative business suggestion.

Cons of Partnership

In joint partnership, each partner is individually responsible for the activities of the other partners.

The profit is shared and disclosed to each partner. There are sometimes issues related to superior skills and time devoted by each partner in the partnership deed. This might creates problems and ambiguities.

There are huge chances of disagreement since decisions are taken on a cumulative basis. Partnership is for the future and objectives and conditions can modify, which can cause to extraordinary and stressful split ups.

Moreover, partnership may have a restricted life; it may end upon the withdrawal or ...