Sole proprietorship and partnership

Front

Partnership

Back

voluntary association of two or more persons to act as co-owners of a business for profit

Front

Ease of startup

Back

Only need to register the business name and obtain licenses or permits to meet the legal requirement.

Front

Availability of capital and credit

Back

More capital as partner can pool their funds and general liability of partners can form better credit rating.

Front

Personal interest

Back

general partners are vey concerned with the operation of the firm, responsible for their own actions and of other general partners

Front

Combined business skills and knowledge

Back

partners with different strength can offset other's weakness.

Front

Retention of profits

Back

all profit belongs to the owner of partner ship.

Front

No special taxes

Back

only need to pay personal income tax

Front

Unlimited liability

Back

Each general is legally and personally responsible for the actions, debts, taxes of any other partner, even they did not do anything wrong. Limited partner only risked for their original investment

Front

Management disagreement

Back

one partner's action disturb others. For example, one partners disagree about decisions, policies, or ethics, distrust may prevent business from success

Front

Lack of continuity

Back

partnership is terminated if any one of the general partners dies, withdraw or declared legally incompetent