Advantages And Benefits Of Partnership

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Question_1 A. The advantages of partnership: 1. Relatively easy and cheap to establish and dissolve the business. Different with company, the forming of partnership is very easy, without any approval and registration. People may decide to create a business together and probably have formed a partnership. They even probably created partnerships without realising if they are partners. The most important thing is the true relationship between the parties who agreed to start a business. However, a good agreement may be needed to set up a good partnership, however, it will not cost so much. Some of the important things need to be included in a good agreement are: names and addresses of the partners, name and address of the business, start…show more content…
4. Partners are having fiduciary duties to each other. According to s 28 (1), the partners have access to the firm’s book or report so they know how the business is going, s 29 (1) deal with the accountability of the partners who act for their own profits, and s 30 (1) restricts the partners from competing the firm’s business. The Birtchnell case shows that a fiduciary relationship will exist only if the parties act for joint advantages only. 5. Attracting employees to become a partner. One of the incentives that given to the employees of the firm is the fact that they may be invited to become a partner if they perform well, because it is easy to change the structure of the partnership. 6. Easy to make up and change the agreement. Agreement in partnership is not compulsory, however, even if the agreement has been set very well, it is still possible to make up or change the agreement. For example, changing the proportion of the contribution made by the partners or there is changes in the composition of the partners (in or out). 7. The ability to split income at the level of ownership and shared responsibility. The income of the partnership will be split to each partner. This means that the partnership as well as the partners can lodge the tax return, so they may be getting tax return twice.
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