Partnership
Definition
A partnership is a meeting of the minds
between two or more persons, where in they
bind themselves to contribute money
property, and/or industry to a common fund,
with the purpose of dividing the profit from
among them or exercising a common
profession.
Characteristics
• Mutual Contribution
• Division of Profits or Losses
• Co-ownership of Contributed Assets
• Mutual Agency
• Limited Life
• Unlimited Liability
• Income Taxation
• Partner’s Equity Account
Advantages versus Sole Proprietorship
• Brings greater financial capability to the
business
• Combines special skills, expertise and
experience of the partners
• Offers relative freedom and flexibility of
action in decision-making
Advantage versus Corporation
• Easier and less expensive to organize
• More personal and informal
Disadvantages of Partnerships
