Advantages of business partnerships include (Jux Law Firm, np):
Businesses which are in the form of partnerships are not required by law to pay income tax. Instead, each partner files the losses or profits of the business partnership as their personal income tax return. Therefore, the business is exempted from paying taxes.
Business partnerships are also easy to establish. There is no much legal procedure for one to start a partnership, especially a general partnership. The cost of starting a business partnership is lower compared to other forms of business such as a public limited company.
Since there is more than one owner in a business partnership, it is easier to raise funds. The various partners also increase the borrowing capacity of the business.
In a business partnership, there is a wider pool of skills, contacts, and knowledge. This is due to the presence of more than one partner. This brings about improved management.
Disadvantages of a business partnership include (Jux Law Firm, np):
There is a joint liability for general partners in a business partnership. All the general partners are responsible for the actions taken by other partners regarding the business partnership. These liabilities may include contracts and breaches of trust. A third party can, therefore, sue all the partners by just using one of them. When one general partner is sued, the rest become liabl…
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