CREATING A PARTNERSHIP

Written Agreement Oral Agreement

Written agreement should cover at least
the following:
1.Management
2.Property Ownership and Contribution
3.Share of Profits and Losses
4.Records
5.Taxation
6.Termination
7.Dissolution
Partnerships cannot succeed unless partners
have trust and faith in each other’s ability to
make sound business decisions
Terminating a Partnership
 May be terminated by:
1.Agreement
2.At Will
3.Operation of Law
Advantages of Partnership
1. Can be easily to established as the sole
proprietorship
2. Has defined legal status
3. More persons to manage and to solve its
problems
4. Larger amount of capital
5. Retention of valuable employees is ensured
6. Combined abilities, skills and resources of
partners are great source of strength
Disadvantages of Partnership
1.Unlimited liability of the partners
2.Managerial difficulties
3.Inevitable disagreement among partners may
endanger the business firm
4.Limitation in size
5.Frozen investment
6.Lack of continuity
7.Easy dissolution
Advantages of Limited Partnership
1.There is a single direction of management,
hence there is unity and immediate action taken
upon.
2.The limited Liability of limited partners shall
serve as good enticement of investors resulting
in larger amount of capital to expand business
operations.
Disadvantages of Limited Partnership

1.The unlimited powers entrusted to general

partners may be abused. The limited partners
cannot interfere in the administration of the
business firm even if there is mismanagement.
2.There is a great possibility of connivance among
the general partners to commit fraud against
the creditors and the limited partners.