suggest partnership as the most suitable ownership for their new business. Following
differences between strengths and weakness of partnership and limited company
will be prove that partnership is the best option for Mr. Fernando and Mr.
Perera for their new business. A partnership is commonly a business structure
that formed by two or more people who expect to form business together.
Sometimes partnership can be begins within two or more people who have a common
business idea and skills that they aim to make a successful business. In some situations
partnership will be the most logical option. Compare to other business
structure it will be a good choice of legal structure to carry on a small
business with a low turnover.
most important thing is partners can share their profits, liabilities and
decision making among their partners. In a partnership partners will collect
funds by their initial capital. They can collect more money by more partners
and it will help to the business growth and the flexibility of the business. It
also means more profits which will equally share between partners. In a
partnership partners can share their responsibilities according to their
skills. It will help to achieve successful outcomes from the business. More
partners means more ideas for solving problems and can help each other when
they need. Other important thing is this kind of business can easily form,
manage and maintain. There are less regulations than companies and partners can
continue their business under agreements of partners without any interference
by shareholders like limited company.
we can point out many strength exist within partnership. Likewise strengths,
there are some weaknesses that partners can be face during their business
activities. As partners it is necessary to agree with things that are being
done in such a situation and there are less freedom to take decisions as an
individual, otherwise it leads to disagreements between partners and also each
partner liable for actions by other partners. Last one is unlimited liabilities
which bare by partners (Example: Financial risk).
company is a company whose liability is limited. The main strength of the
limited company is the financial security. Shareholders are the only people who
liable for debt. This reason will give a comfortable condition to the investors
in the company. When consider about the weaknesses of limited company startup
cost is comparatively high than the partnership. And also there are complex
rules in accounts than partnership. In limited companies’ shareholders can’t
raise the capital by sale of shares. Sometimes disputes will arise between
director and shareholder as their ideas of what is best for the company
consider about the above mentioned strengths and weakness of partnership and
limited company it seems like it is better to form the new business as
partnership. Well formation according to the procedures and rules of suggested
business structure will give successful outcome to those two partners without