Subject: Business Studies
A partnership form can be started by making the agreement between partners and registration concern department of Nepal government. This business does not require complex legal procedures for an establishment.
References:
Khanal, Soma Raj, Surendra Thapa Aslami and Sitaram Dhakal. Business Studies. Kathmandu: Taleju Prakashan, 2067.
Pant, Prem R., et al. Business Studies. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd., 2010.
Advantage of Partnership Firms
Disadvantages of Partnership
What are the advantages and disadvantages of a partnership firm?
The advantages of partnership are:
The disadvantages of partnership are:
Describe the advantages of partnership firm.
The advantages of partnership firm are described below:
Prompt Decision:
As the partners are directly involved in business activity, they are readily available for decision making. Because of this partnership, a form has higher chances of getting the prompt decision. This could be much more beneficial for the emergency situation.
Equal rights of partners:
The concept of minority and majority is not allowed in partnership. All the partners have equal rights to participate in decision-making and involve in business activity. The concept of share is applied only in profit distribution.
Easy to dissolve:
A partnership business can be dissolved after making the agreement between partners regarding the dissolution of a business. The dissolution of partners does not require any complex legal procedure.
Describe disadvantages of a partnership firm.
The disadvantages of partnership firm are described below:
Problem of dispute:
Even though partnership business form is firm by the agreement of partners the partners may not agree all the time. The partners may disagree (dispute) regarding dispute of profit/use of authority. This dispute between partners
may create a problem in existence of business.
Risk of implied authority:
In partnership business, active partners authorised to make a decision on behalf of business other partners. There is no certainty that active partners will make a decision for the betterment of the business. There is a risk that active partners may take a decision on personal benefits. Therefore, a partnership has the risk of implied authority.
© 2019-20 Kullabs. All Rights Reserved.