All about Partnership Firm
Partnership business is easier to establish, start-up cost is low and it is ideal for the small entrepreneur(s) wants to start partnership business and are generally not willing to raise funds through open market. It does not involve many of the complex filing requirements associated with other types of business structures. Forming a partnership is one solution to overcoming certain disadvantages associated with running a business as a sole trader. A partnership is a way of sharing the problems, risk, hard work and the association which will always be a part of trying to manage all aspects of a business you own.
Due to more number of members/partners, the firm will have larger resources for operations in comparison to sole proprietorship business and consequently will have better management. Risk sharing is to be borne by each partner individually although will have unlimited liability as any of the partner can be held liable of others wrong doing. Personal assets of the partner(s) can also be attached for recovery of debts, losses or pending dues. Partnership firm does not enjoy the legal status like in case of corporation, which can raise funds through stock market etc. it is beneficial for small and closely held businesses.
Benefits of Partnership
- Ease of Formation– It is very easy to open up the Partnership Firm as compare to any form of business.
- Partners– You can have up to 20 partners in same firm.
- Budgeted– Cost wise it is much budgeted to start the Partnership Firm.
- Closure/Dissolution– Closing the partnership is very easy process as compare to other form of business.