Advantages Of Using Partnership And Corporation The Business Structures

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There are a number of business structure depends on the size and type of the business. In Australia, there are four main structures: sole trader, partnership, corporation/ company and trust. This particular discussion will focus on the advantages and disadvantages of using partnership and corporation the business structures.
In the business world, a partnership describes a relationship or association between two or more persons with a view to profit. A proper definition of partnership as in the Partnership Act is “Partnership is the relation which subsists between persons carrying on a business in common with a view to profit and includes an incorporated limited partnership.” Therefore, it has several advantages compared to other
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Moreover, there is a lot more flexibility for using this structure as they can change the nature of the business easily. Besides, if their business name consists of all the partners’ name they don’t have to register with the Australian Securities and Investment Commission (ASIC).
 Confidentiality and control
The partnership is a private business structure where the partners have a role in management and decision makings of the business. Every partner is allowed to have access to all information affecting the partnership, as stated in the Partnership Act. It is one of the elements of partnership when in the case of corporations, “the shareholders have no power to transact the company’s business”.
However, the partnership structure also has to face a few challenges/ disadvantages which include:
 Unlimited liability
It means that the partners have no separate legal existence to the partnership. In other words, if the business failed to meet its expectations (profits), the partners may had to settle the debts by liquidating their own assets or cash. A partner is liable for all debts and obligations drawn when he/she is a partner. This is one of the biggest disadvantages of this structure compare to corporation.
 Not freely transferable of shares and interests
As there is no stock exchange for the transfer of shares in partnership, shares is not as easily transferable as shares in corporations.
 Limited
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