Partnership – advantages and disadvantages

Perth Businesses

A business formed as partnership can be defined as an association of two or more persons who have agreed to combine their labour, property, and skill, or some or all of them, for the purpose of engaging in lawful business and sharing profits and losses between them.

In a partnership, the partners are presented with special challenges that must be navigated unto agreement. Once agreement is reached, the partnership is typically enforceable by civil law especially if well documented. Partners draw up Articles of Partnership when they wish to make their agreement affirmatively explicit and enforceable typically.

Many people are encouraged to get into business partnership if it helps to pool the talents or skills of partners for their mutual benefit. If you want to become a partner of a certain business partnership, you must be compatible, honest, healthy, capable, dedicated and equally motivated to succeed. And because of the voluntary nature of partnerships, they are relatively easy to set up.

Since a partner acts as an agent of the organisation in the conduct of its business, he or she must exercise the highest degree of good faith in all dealings with the other partners, devote time and attention to the partnership business, and must account to the other partners for any secret profits made in the conduct of the partnership business.

Read more about partnership from this link: https://www.business.tas.gov.au/starting-a-business/starting-a-business-from-scratch/choosing-a-business-structure-intro/partnership-advantages-and-disadvantages