Commerce: Advantages and Disadvantages of Partnerships

Advantages

• Management is duties are shared amongst the partners.
• More capital can be raised.
• More skills are available resulting in better quality decision making.
• Specialisation is possible.
• Partners can consult one another.
• There are fewer legal formalities.
• Losses are shared amongst partners.

Disadvantages

• Disputes may lead to the dissolution of the partnership.
• Some partners have unlimited liability.
• Consultations may lead to delays in decision making.
• There is no continuity as the partnership is dissolved if one of the partner dies or leaves the partnership.
• Agreements made by one partner are binding to the whole partnership.
• Amount of capital raised is still limited due to a cap on the number of partners for most partnerships.
• Profits have to be shared among partners.

To access more topics go to the Commerce Notes page.