General Facts
A partnership generally has this number (range) of partners.
What is 2 to 20?
Although it is not compulsory, it is recommended that partners draw up this legally binding agreement to outline the terms and conditions of their agreement.
What is a Partnership Deed?
Partnerships usually have greater access to sources of finance than a sole trader. Why is this so?
Because there are more partners to contribute capital / money.
With more partners involved, this can become long, tedious and time-consuming as everyone's views have to be considered.
What is the decision-making process?
In a general partnership, partners usually take an equal share in management responsibilities and share profits equally. However, they are all personally responsible for all debts and obligations. This is referred to as ____ _____ .
What is unlimited liability?
The written agreement between partners should state how much money each partner contributes. This money is referred to as ______.
What is capital?
Why might there be better decision making in a partnership?
Because with more partners there is greater access to expert knowledge.
This may arise among partners especially if some feel they have more workload and responsibilities than others.
What is conflict?
Name three professions that may be suitable to operate as partnerships.
What are doctors, lawyers, accountants, dentists. (Can accept other suitable answers)
In terms of formation, a partnership is similar to a sole trader in this respect.
They are both relatively simple to set up.
Why might the workload in a partnership be easier than in a sole proprietorship?
Because partners can share the workload and responsibilities. Partners may even be able to take vacation and sick leave.
If one partner acts unethically, it can have this effect on all other partners.
They can all be held legally liable.
In this type of partnership, one person's personal possessions can be seized to pay off debts while the other partners' personal assets cannot be touched.
What is a Limited Partnership?
When there is no written agreement among the partners, this law will govern the affairs of the business.
What is the Partnership Act?
This type of partner contributes money but is not usually involved in the day-to-day running of the business.
Who is a Sleeping Partner?
Other than how much money each partner contributes, name three other areas that should be covered in the agreement between partners.
How profit should be shared.
The roles and responsibilities of each partner.
The voting rights of partners
The duration of the partnership / terms of dissolution.
A partnership does not have to dissolve if one of the partners dies. This is an advantage as there is greater __________ in the business.
What is continuity?