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ZIMSEC O Level Commerce Notes: 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.


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