Partnership Advantages and Disadvantages/Examples
Easier to attract investors because limited partners have limited liability to the business debts.
Advantages
Easy to establish.
Advantages
Improved management with more than one owner.
Advantages
Limited partners get to share in the profits and losses without having to participate in the business itself.
Advantages
Profits and losses pass through the business to the partners, who are taxed on their own personal income tax returns.
Advantages
Share liabilities/Less risk
Advantages
There is an increased ability to raise funds when there is more than one owner.
Advantages
Wider pool of knowledge, skills, and contacts.
Advantages
A partner cannot transfer interest in the business without the unanimous consent of the partners.
Disadvantages
Better work/Life balance
Disadvantages
Certificate of Limited Partnership must be filed with the state before the partnership comes into existence, which includes state filing fees.
Disadvantages
Disagreements
Disadvantages
Each partner is individually liable for the debts and obligations of the business; if the business does not have enough assets to pay back business debts, creditors can take the personal assets of the partners.
Disadvantages
General partner is personally fully liable for the debts of the business.
Disadvantages
Give up power to make decisions
Disadvantages
If the limited partner becomes active in the business he or she may have general-partner personal liability.
Disadvantages
Partnerships can potentially be unstable because of the danger of dissolution if one partner wants to withdrawal from the business or dies.
Disadvantages
Unfair share of work
Disadvantages
Convenience stores
Examples
Doctors
Examples
Lawyers
Examples
Nail Salons
Examples
Restaurants
Examples