Please enable JavaScript.
Coggle requires JavaScript to display documents.
Partnership (PARTNERSHIP AGREEMENT ( NAME OF THE BUSINESS , FULL NAMES…
Partnership
PARTNERSHIP AGREEMENT
-
- FULL NAMES OF ALL PARTNERS
- AMOUNT OF MONEY EACH PARTNER WILL CONTRIBUTE
- LABOUR, SKILLS AND KNOWLEDGE EACH PARTNER WILL CONTRIBUTE
- HOW THE PROFITS AND LOSSES WILL BE DIVIDED
- PROCEDURE OF ENDING THE PARTNERSHIP
-
- ALL PARTNERS MUST SHARE IN THE PROFIT
- NO LESS THAN 2 PARTNERS MAY ENTER A PARTNERSHIP
Characteristics
- MINIMUM 2 TO MAXIMUM 20 PARTNERS
- THERE MUST BE A WRITTEN AGREEMENT BETWEEN THE PARTNERS
- UNLIMITED LIABILITY - PERSONAL BELONGINGS CAN BE SOLD
- EACH PARTNER IS TAXED ON THEIR OWN PERSONAL INCOME
- LACK OF CONTINUITY - IF 1 PARTNER DIES OR LEAVES THE PARTNERSHIP - THE PARTNERSHIP DISSOLVED
WAYS OF ENDING A PARTNERSHIP : PARTNER DIES, NEW PARTNER JOINS, * BUSINESS BECOMES INSOLVENT
- TO EXPAND THE PARTNERSHIP - PARTNERS CAN OBTAIN MORE CAPITAL (BORROWED CAPITAL OR SAVINGS CAPITAL)
- TO ESTABLISH THERE MUST BE A PARTNERSHIP AGREEMENT
-
Advantages
- Only a FEW legal entities to establish a partnership
- MORE CAPITAL is available than in a Sole Trader
- Each partner can SPECIALISE in looking after different parts of the BUSINESS
- There is MORE personal contact between the partners and customers
-
- Each PARTNER can provide the business with their SKILL
Disadvantages
-
- ALL PARTNERS IS LIABLE FOR THE DEBT
- PARTNERS ARE JOINTLY AND SEVERALLY LIABLE for the DEBT
- If one 1 partner does something wrong ALL PARTNERS ARE INFLUENCED
- DISAGREEMENTS OF RUNNING THE BUSINESS
- PARTNERSHIP comes to an end when 1 partner decides to leave or if 1 partner dies.
DEF: A partnership is a form of ownership where 2 - 20 partners can start their own business. This type of business is usually found in the service industry (Lawyers, Doctors, Accountants)