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.
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:
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.
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