Thursday, March 05, 2009

Partnership Business - Advantages & Disadvantages

Partnership Business - Advantages & Disadvantages


Advantages:

  • Simple organization
  • Additional personal resources (financial and managerial)
  • The right to select partners
  • Low start-up (organizational) costs
  • Limited outside regulation
  • No double taxation

Disadvantages:

  • Costs more than sole proprietorship
  • Unlimited liability for all partnership obligations
  • Lack of continuity in event of death or disability of one partner
  • Sharing of profits
  • All profits are taxed as personal income
  • Difficult to raise additional capital
  • Hard to find suitable partners
  • Divided authority (limited decision-making)

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