What are the advantages and disadvantages of an operating business in a partnership form?

What is Partnership Firm?

When two or more person enters into an agreement to share profit of a business carried on by them or any of them is known as Partnership Firm.

Advantages of operating business in a Partnership Firm:

• Easy formation

• Availability of more resource as compared to a Sole Proprietorship Firm

• Better decision making process as each of partners has right to participate

• Flexibility in operation as compared to other forms of business

• Sharing risk and responsibilities

• Equal decision making power

• Benefit of specialization

Disadvantages of operating business as a Partnership Firm:

• Unlimited liability of Partners

• Risk of disagreement

• Higher cost for any changes in Existing Partner

To know further about advantages of partnership firm registration, check out blog at “Registered Partnership Firm: Procedure & Benefits of Registration”

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