Understanding Business Partnerships

The video explores the concept of business partnerships, using Sarah and Jess's vet practice as a case study. It discusses the importance of a deed of partnership, the advantages such as shared risk and skills, and the disadvantages like unlimited liability and potential disputes.

What is a business partnership?

• A business owned by a single person

• A business owned by two or more people

• A business owned by a corporation

• A business owned by the government

Why did Sarah and Jess decide against forming a sole trader business?

• They needed to incorporate the business

• They wanted to share ownership and decisions

• They preferred to work alone

• They wanted to sell shares

What is the purpose of a deed of partnership?

• To outline the business's marketing strategy

• To detail the rights and responsibilities of partners

• To determine the business's tax obligations

• To register the business with the government

How did Sarah and Jess decide to split their business profits?

• According to their workload

• Equally between them

• Based on their experience

• Based on the amount each invested

What is one advantage of forming a business partnership?

• Shared risk and responsibilities

• No need for a business plan

• Complete control over decisions

• Unlimited liability

What is a 'sleeping partner' in a business partnership?

• A partner who is responsible for marketing

• A partner who manages the business alone

• A partner who only invests money but does not participate in daily operations

• A partner who is actively involved in daily operations

Why might a partnership be seen as more credible than a sole trader?

• Because it can sell shares

• Because it has more owners

• Because it is perceived as more trustworthy

• Because it is incorporated

What is a major disadvantage of a business partnership?

• Complete independence in decision-making

• No need to share profits

• Shared control and potential disputes

• Limited liability

What does unlimited liability mean for partners?

• They are not responsible for business debts

• They can only lose their initial investment

• They are personally responsible for all business debts

• They have limited control over business decisions

How can disputes in a partnership affect the business?

• They can increase profits

• They can prevent the business from moving forward

• They can lead to faster decision-making

• They can reduce the need for a partnership agreement