Write at least 5 pros and cons of a partnership business ownership. And give 2 examples...

Write at least 5 pros and cons of a partnership business ownership. And give 2 examples of companies under this type of ownership.

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Expert Solution

PROS OF PARTNERSHIP Two or more persons in a business are better than one person
Partnership business is easy to establish and start-up costs are low
More capital is available
Greater borrowing capacity
There is opportunity for income splitting
Advantage of income tax saving
Partnership business affairs are private
There is limited external regulation
Easy to change legal structure

Cons of partnership

Unlimited liability of the partners for covering debt.
Each partner is ‘jointly and severally’ liable for the partnership’s debts; implies each partner is liable for their share of the partnership debts as well as being liable for all the debts
There is a risk of disagreements and friction among partners
Each partner is an agent of the partnership and is liable for actions by other partners
if partners join or leave, there is a need to value all the partnership assets and this can be costly
For example Nike & apple , Uber & spotify

Rahul Sunny answered 1 year ago

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