Disadvantages Of The Partnership Act 1891

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According to the Partnership Act 1891 (SA), section 1(1), a partnership is defined in four sections. These sections relate to a business which includes any trade, occupation or profession that is carrying on involving continuity and system in common in terms of mutuality of rights and obligations with all the partners, and lastly with a view to profit, therefore resulting in an incorporated limited partnership. A corporation, however, is defined as a separate legal entity from its owners that also has the rights and responsibilities that an individual or a partnership entity possesses. This means that corporations and their shareholders have the right to participate in the profits, but will not be held accountable for the company’s debts and legal issues.
The advantages of a partnership are generally about the financials of the structure, whereas the disadvantages tend to be more towards the liability of the partners involved. Comprehensively, the advantages consist of the formation of a partnership which can be relatively simple as it involves an express agreement in the form of a written agreement, usually acknowledged as a deed, or an oral agreement. Partnerships can also be formed with no express partnership agreement, via implication or conduct where the courts have held a partnership existed from the conduct of the parties. Nevertheless, this meaning is unclear as negative rules exist also, for instance section 2(1)(a-c) of the Partnership Act 1891 (SA) which state

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