{"id":1412,"date":"2017-01-09T19:42:38","date_gmt":"2017-01-09T19:42:38","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/montgomerycollege-masterybusinesslaw2\/?post_type=chapter&p=1412"},"modified":"2017-01-09T19:42:38","modified_gmt":"2017-01-09T19:42:38","slug":"partnerships-2","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/montgomerycollege-masterybusinesslaw2\/chapter\/partnerships-2\/","title":{"raw":"Partnerships","rendered":"Partnerships"},"content":{"raw":"
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Learning Objectives<\/h3>\n
  1. Identify the different types of partnerships, and explain the importance of a partnership agreement.<\/li>\n\t
  2. Describe the advantages and disadvantages of the partnership form of organization.<\/li>\n<\/ol><\/div>\nA partnership (or general partnership)<\/span><\/span> is a business owned jointly by two or more people. About 10 percent of U.S. businesses are partnerships, and though the vast majority are small, some are quite large. For example, the big four public accounting firms are partnerships. Setting up a partnership is more complex than setting up a sole proprietorship, but it\u2019s still relatively easy and inexpensive. The cost varies according to size and complexity. It\u2019s possible to form a simple partnership without the help of a lawyer or an accountant, though it\u2019s usually a good idea to get professional advice. Professionals can help you identify and resolve issues that may later create disputes among partners.\n
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    Advantages and Disadvantages of Partnerships<\/h2>\n
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    Factors<\/h2>\n<\/td>\n

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    Consideration<\/h2>\n<\/td>\n<\/tr>

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    Start-up<\/h3>\n<\/td>\n

    		Fairly easy and cheap to form, though legal assistance is often helpful<\/td>\n<\/tr>
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    Control<\/h3>\n<\/td>\n

    		Partners must share decision making<\/td>\n<\/tr>
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    Benefactors<\/h3>\n<\/td>\n

    		Partners share profits<\/td>\n<\/tr>
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    Taxation<\/h3>\n<\/td>\n

    		Partners pay personal income taxes on their share of profits; the partnership doesn\u2019t pay any special taxes<\/td>\n<\/tr>
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    Capability<\/h3>\n<\/td>\n

    		Can bring together a diverse group of talented individuals who share responsibility for running the business<\/td>\n<\/tr>
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    Sustainability<\/h3>\n<\/td>\n

    		Partners can agree legally to allow the partnership to survive if one or more partners die<\/td>\n<\/tr>
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    Financing<\/h3>\n<\/td>\n

    		The business can draw on the financial resources of a number of individuals<\/td>\n<\/tr>
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    Liability<\/h3>\n<\/td>\n

    		Partners are subject to unlimited liability; each partner is personally liable not only for his or her own actions but also for the actions of all the partners<\/em>. The law also permits a limited partnership<\/span><\/span>, which has two types of partners: a single general partner<\/em> who runs the business and is responsible for its liabilities, and any number of limited partners<\/em> who have limited involvement in the business and whose losses are limited to the amount of their investment.<\/td>\n<\/tr><\/tbody><\/table>
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    The Partnership Agreement<\/h2>\nPartnerships are susceptible to conflicts and disputes since they require decision-maker to occur across all partners. The impact of disputes can be lessened if the partners have executed a well-planned partnership agreement<\/em> that specifies everyone\u2019s rights and responsibilities. The agreement might provide such details as the following:\n