Partnerships Flashcards Preview

Business Studies > Partnerships > Flashcards

Flashcards in Partnerships Deck (11):
1

What is a partnership?

This is where 2-20 partners work together in a business. Examples of partnerships are solicitors, doctors, dentists and accountants.

2

What is the Deed of Partnership?

An agreement between a group of partners setting out the legal relationship under which the partnership is set up, how profits and work will be shared out etc.

3

What is the Articles of Association?

A document setting out the details of the internal relationships that exist within the company. For example, when company meetings will be held and also how directors will be chosen etc.

4

Who owns the business in a partnership?

The partners.

5

Who controls the business in a partnership?

The partners.

6

Who manages the business in a partnership?

The partners.

7

How is finance raised in a partnership?

It is raised by the partners through person savings or capital borrowed from the bank.

8

Who does the profit go to in a partnership?

The partners.

9

What is included in a Deed of Partnership?

- Names of partners and the business.
- Addresses of partners and the business.
- Amount of capital invested by each partner.
- How profits will be shared.
- Rules that will ensure the fair running of the business. (for example, working hours, holidays and responsibilities)
- Arrangement in case a partner falls ill or dies.

10

What are the advantages of a partnership?

- More owners means more capital generated.
- Work can be shared.
- Partners can specialize in what they do best.
- Partners can cover for each other during holidays.
- Financial details of the partnership are private.

11

What are the disadvantages of a partnership?

- Profits must be shared between partners.
- All partners have unlimited liability expect from sleeping partners.
- Partners have to consult each other before decisions are made.
- Decision making can be slow.
- Partners may disagree about the running of the business.
- Each partner is legally responsible for the actions of the others.