Advantages And Disadvantages Of Partnerships10/15/2020
Difference of opinion very often results in disharmony and lack of management, when differences arise, each partner tries to blame the other partner about his dishonest dealings and working against the interest of the firm.Advantages of Partnership: The partnership form of organisation is most suitable when the size of business is medium and, thus the capital can be contributed to meet its needs by the partners themselves.
The following are the advantages of partnership form of organisation: ADVERTISEMENTS. No formal documents are required to be prepared as required in the case of joint stock companies. An agreement which may be oral or written is sufficient to enter into partnership form of organisation. Advantages And Disadvantages Of Partnerships Registration Of PartnershipEven the registration of partnership is not compulsory. Large Resources: The partnership form of organisation enjoys large resources than a sole proprietorship so that the scale of operation can be enlarged to get the benefit of large-scale economies. The partnership firms can also arrange money from the outside sources. Flexibility: The business is, abundantly mobile, flexible, and elastic being free from legal restriction on its activities. The partners can introduce any change they consider desirable to meet the changed circumstances. Combined Skill and Balanced Judgement: ADVERTISEMENTS. This is the distinctive advantage partnership enjoys over the sole proprietor because everything is done by mutual consultation. According to S. S. Chatterjee, Combined abilities and judgement, when properly integrated produce a result that becomes appreciably greater than the sum of all individual capacities. Sharing of Risk: Any loss sustained by the firm will be borne by all the partners equally with the benefit that the burden borne by each partner will be much less whereas the sole proprietor has to bear the entire loss of the business. The supervision of staff can also be carried out effectively, as partners, personally act in the management of the affairs of the partnership firm. Maintenance of Secrecy: The partners of partnership firm can keep the business to themselves. A partnership firm is not expected to get its accounts audited and published as is necessary for a joint stock company. This is the distinctive advantage partnership enjoys over the joint stock company. Relationship between Reward and Work: In partnership form of business organisation, there is an direct relation between reward and work. This enables the partners to put more labour to earn more and more profits. In partnership concern all important decisions are taken with the consent of all partners. In policy matters, all partners must agree, and even in ordinary affairs of routine nature a dissatisfied partner may withdraw and dissolve the firm. The law gives right to each partner to be consulted and heard. In the case of a company, the interests of the minority are not well-protected. This is the distinctive advantage partnership concern enjoys over the company. Easy Dissolution: Dissolution of the partnership concern is very easy. The partnership can be dissolved on the death, lunacy or insolvency of a partner. If the partnership is at will then any partner can get the partnership firm dissolved by giving notice to other partners. Disadvantages of Partnership: The partnership concern suffers from the following disadvantages: 1.
0 Comments
Leave a Reply.AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |