This article is for the classification of Types of partnership and advantage and disadvantage of partnership. Before doing that kind of business structure all partners should have knowledge of it. so can run the business as per their suitability. As the main concept of partnership is when more than two people come into one place for doing business with the aim of earning a profit, But if we focus for the duration of business or responsibility, then kind of partnership will change from one category to other.
What are the 4 Types of Partnership
Types of Partnership by Project
- General Partnership, This is the Ge renal and common type of partnership. Here the concept is to run the business and earn profit without any specific period or to the completion of the task.
- Joint Venture, In this type two persons or companies, come into agreement for the completion of the task. When the task is completed the partnership is dissolved.
Types of Partnership by Liability
- Limited Liability Partnership: This type of partnership is not common, however, its concept is now growing in countries. In this kind of partnership, all partners have limited liability. Their personal property will not be entitled for the clearance of firms debts.
- Limited Partnership: In such a partnership, there should be at least one general partner and the other may be having limited liability. The General partner should have to pay all the debts in case of loss.
Advantages of Partnership
- Multiple creative skilled Mind
- Healthy Capital
- Easy for creation and Establishment
- Borrowing Facility
- The large area of Operation
- Assignment of the task as per skills
- Contribution of Loss
- Public Trust
- Business Secret
- Easy to change nature or type of Business
- Simple Dissolution Procedure
As compare to Single proprietorship, a Partnership firm for business is good because of multi-skills personalities, creative mind stock and large Capital in the business.
Disadvantages of Partnership
- Limited Capital as compare to Companies
- The personal act of Partner effect
- Partner’s disputes
- No facility of Nomination
- Business Secrets and Ideas Threats
- Limited duration