Partnership

= PARTNERSHIP =

A partnership is a form of business in which two or more people operate for the common goal which is often making profit. In most forms of partnerships, each partner has personal liability of the debts incurred by the business. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.

ADVANTAGES

 * East to start-up a partnership
 * Start-up costs would be shared equally with you and your partner
 * Equal share in the management, profits and assets
 * Tax advantage if income from the partnership is low or loses money (you and your partner include your share of the partnership in your individual tax return)

DISADVANTAGES

 * Similar to sole proprietorship as there is no legal difference between you and your business
 * Unlimited liability (if you have business debts, personal assets would be used to pay off the debt)
 * Hard to find a suitable partner
 * Possible development of conflict between you and your partner
 * You are held financially responsible for business decisions made by your partner (for examples: contracts that are broken)