Business Studies Collins Revision Guide. - StudyGuide.PK

OWNERSHIP AND CONTROL (2)Partnership●●●●●●●●A partnership is an agreement between two or more people to ownand take responsibility for a business.What is shared?■ The money needed to start up the business■ Ownership■ Liability for any debts■ Profit■ Decisions■ The jobs that need doing■ Knowledge and skills.Usually a deed of partnership is drawn up. This is a legaldocument that includes:■ how much money each partner will put in to start the business■ how profits and losses are to be shared■ what each partner will have responsibility for■ how the partnership will be ended.Having a deed of partnership can prevent problems anddisagreements in the future.Partnerships have unlimited liability which means a partner could beresponsible for some debts even if they were caused by another partner.Partnerships have a lack of continuity. If one of the partners dies,then the partnership is ended.Partnerships usually have more capital then sole traders so an aimmay be to expand, as well as to survive and make a profit.Disagreements between the partners may make decision-makingdifficult.Having to share profit means that the person who does the mostwork may not be the one who gets the greatest reward.2