What Are the Advantages of Partnership Over a Sole Proprietorship?

A partnership is a business in which two or more people agree to share ownership and management responsibility for a business. Often partners get together due to complementary skills.

Significance of a Partnership

Although you still work basically for yourself just like in a sole proprietorship, you get to share responsibilities and have equal input to major decisions.

Function of Partnership

If you pick your partners for their skills, you may split responsibilities among the partners. You no longer have to be good at every aspect of the business, but may divide the duties according to each partners' expertise.

Benefits of Partnership

It is easier to raise capital in a partnership than a sole proprietorship. You no longer have to depend solely on your borrowing power, you also have the borrowing capability of your partner(s). In this way it is much easier to grow your business.

Effects of Partnership

By sharing in the profits, partners work harder and strive for success. You no longer have to depend on only your drive to succeed.

Warning

Just as in a sole proprietorship, partners are still responsible for unlimited liability, both personal and business. Therefore, everything you own is at risk.