Merits (advantages) of partnerships
- Losses and other risks are shared among the members. Partnerships involve a number of members and therefore the risks per unit member are greatly reduced.
- Partnership creates room for specialization within its members. This is because different members have different skins regarding production, management, marketing etc. within the organization.
- There is continuity in business in case of death or sickness of one partner unlike under sole proprietorship.
- It is to expand the scope of discovery and innovation under the partnership, This is because members can easily share the skills and knowledge concerning business operations. This leads to improvement in the performance of the business.
- It is easy to form a partnership as compared to the joint stock company. This is because it requires less documents or formalities as in the case of joint-stock Companies.
- It is possible to enjoy economies of large scale, this is because it is easy to rise capital and expand on the operations of the business.
- It is easy to raise enough capital to start and expand the business under partnership. This widens the capital base as compared to the sole proprietor.
CATEGORIES Economics
TAGS Dr. Bbosa Science
