In: Accounting
1.. advantage and disadvantages of the partnership and sole proprietorship? just the point no need explanation
Advantages and Disadvantages of Partnership:
Advantages | Disadvantages |
More Capital will be available | Partners have unlimited liability for the debts of the business |
Equally shared responsibility | Each partner is an agent of the partnership and is liable for actions by other partners |
Share the start-up costs equally | Higher chances of Conflicts among Partners |
Limited external regulations | A partnership has "limited life" meaning that it can be dissolved due to death, insolvency, retirement etc of other partner/partners |
Nature of the Partnership will depend on the Partnership agreement |
Partnerships have to be built on TRUST between the partners. |
Advantages and Disadvantages of Sole proprietorship:
Advantages | Disadvantages |
Easy to start, only one owner | Raising money by the owner depends upon the factors of production that the owner can obtain |
Sole recipient of all the profits | Management is limited to the skills of the owner |
Quick Decision making | Limited life, if owner dies then business ends |
More flexible | Unlimited liability, all the losses are the owner's responsibility. |