Business – 1.2 Business structure – Business ownership | e-Consult
1.2 Business structure – Business ownership (1 questions)
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Advantages
- Access to additional capital from partners, improving the ability to invest and expand.
- Sharing of skills, expertise and workload, which can enhance decision‑making and operational efficiency.
- Risk is spread among partners, reducing the personal financial exposure of any one individual.
Disadvantages
- Potential for conflict between partners over strategic direction, profit sharing or management style.
- Each partner is jointly and severally liable for business debts, which can increase personal risk compared with a sole trader’s limited liability to personal assets.
- Profit must be divided, so the original owner may receive a smaller share of earnings.