The Main Advantages Of Partnership
In this article we’ll talk about what a partnership is and what are its main advantages. First of all, let’s start with the definition: a partnership is a type of business entity in which partners come together to form a business.
Why do people form partnerships? There could be many reasons. For example, maybe a sole proprietor was thinking, “Damn, I have not enough talent or skill to run this business alone.”
What I find fascinating about this business entity is that everyone shares equal responsibility. That’s why you should choose those people whom you really can trust.
So what are the advantages of a partnership?
1) It’s easy to set up. An oral or written agreement among partners can be enough to start a partnership. From a legal point of view, there are things you need to think about. For example, it is a good idea to set up a deed of partnership in order to protect each party in case something bad happens.
2) You will have more resources available. This is simple math: the more people are working alongside you, the more money you’ll be able to invest.
3) Partnerships are less regulated. You will have less accountability than if you were running a company. Also, this type of business entity will allow you not to publish the accounts of the firm.
4) If your colleague dies or leaves, the business won’t disappear. It is possible to replace a partner without dissolving the partnership (of course, this depends on how you’ve set up the partnership).
5) You will have more expertise available. As I’ve already mentioned above, if you’re working alone you may find yourself stuck with a problem. A partner can look at this problem from a new perspective and maybe find a solution.
Of course, partnerships have also some disadvantages, but we will talk about them in a later article.
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