Question

What form of business ownership would you recommend? For What reasons? What are the "pros" and "cons" of this form of business ownership?

Answer 1

PARTNERSHIP:-

These are two types of partnership: general and limited. In general partnerships, both owners invest their money, labour, property, etc. to the business and are both liable for business debts. General partnerships do not require a formal agreement—partnerships can be implied between or can be verbal between the two business owners.

Limited partnerships require a formal agreement between two or more partners. They have to file a certificate of partnership with the state. Limited partnerships allow partners to limit their liability for business debts according to their portion of ownership / investment.

By partnership burden of running firm reduces foe individual and more new and creative idea can be used in firm come up by different partners. The partner will get profits according to the profit sharing ratio, after fixed period of time.

Advantages:

• Sharing of resources provides more capital for the business
• Simple design and Similar flexibility of a proprietorship
• Inexpensive to establish a business partnership, informal or formal.
• Each partner shares the total profits of the company.

Disadvantages:

• Each partner is 100% responsible for losses and debts.
• Partnership ends when any of the partner wants or decides to end it.
• Difficult to find partner to get in partnership.