ECONOMICS

What is a partnership?

A business owned by two or more people, with no more than 20 owners.

What must partners draw up to form a partnership?

A written agreement or deed.

What are the key elements included in a partnership agreement?

Type of business, contributions, profit sharing, procedures for partner's death, winding up, and admitting new partners.

Is registration required by law for partnerships?

No, partnerships are not required to be registered unless formed as a limited partnership.

What is one advantage of a partnership?

Larger capital.

What is one disadvantage of a partnership?

Unlimited liability.

How can a partnership raise capital?

Through personal savings, loans from friends and relatives, and loans or overdrafts from banks.

What is a Limited Partnership?

A type of partnership where liability is limited, but there must be at least one partner with unlimited liability.

Main features of Limited Partnership?

A limited partner cannot manage the business, liability is limited, and it must be registered.

What defines a General Partnership?

Partners have equal responsibility and risk, with unlimited liability.

What are the main features of General Partnership?

Unlimited liability, partners as agents of the business, equal management responsibility, and equal contractual power.

What happens when a partner dies according to the partnership agreement?

The procedures outlined in the partnership agreement must be followed.