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There is no doubt that going into partnership could ease your financial burden. Instead of paying for everything yourself, your partner can split the cost. Because of the partner's financial contributions, the business might be able to afford more things up front. And, you might be able to avoid large amounts of debt when starting your business. Starting a business with a partner offers many benefits, not the least of which is having someone to share the many responsibilities of running a business. But partnerships can quickly go bad if you don’t give it ample forethought and planning. In partnership, Each partner will bring their own knowledge, skills, experience and contacts to the business, potentially giving it a better chance of success than any of the partners trading individually. Partners can share out tasks, with each specialising in areas they're best at and enjoy most.
Whether you choose to go into partnership it is wise for the entrepreneur to know the advantages and the disadvantages of partnership below are the ones I could come up with:
Advantages of a partnership include that:
1 two heads (or more) are better than one
2 your business is easy to establish and
start-up costs are low
3 more capital is available for the
business
4 you’ll have greater borrowing capacity
5 high-calibre employees can be made
partners
6 there is opportunity for income splitting,
an advantage of particular importance
due to resultant tax savings
7 partners’ business affairs are private
8 there is limited external regulation
9 it’s easy to change your legal structure
later if circumstances change.
Disadvantages of a partnership include that:
1 the liability of the partners for the debts
of the business is unlimited
2 each partner is ‘jointly and severally’
liable for the partnership’s debts; that is,
each partner is liable for their share of
the partnership debts as well as being
liable for all the debts
3 there is a risk of disagreements and
friction among partners and
management
4 each partner is an agent of the
partnership and is liable for actions by
other partners
5 if partners join or leave, you will
probably have to value all the
partnership assets and this can be
costly.
Whether you choose to go into partnership it is wise for the entrepreneur to know the advantages and the disadvantages of partnership below are the ones I could come up with:
Advantages of a partnership include that:
1 two heads (or more) are better than one
2 your business is easy to establish and
start-up costs are low
3 more capital is available for the
business
4 you’ll have greater borrowing capacity
5 high-calibre employees can be made
partners
6 there is opportunity for income splitting,
an advantage of particular importance
due to resultant tax savings
7 partners’ business affairs are private
8 there is limited external regulation
9 it’s easy to change your legal structure
later if circumstances change.
Disadvantages of a partnership include that:
1 the liability of the partners for the debts
of the business is unlimited
2 each partner is ‘jointly and severally’
liable for the partnership’s debts; that is,
each partner is liable for their share of
the partnership debts as well as being
liable for all the debts
3 there is a risk of disagreements and
friction among partners and
management
4 each partner is an agent of the
partnership and is liable for actions by
other partners
5 if partners join or leave, you will
probably have to value all the
partnership assets and this can be
costly.