Advantages and Disadvantages of Partnership - Assignment Example

3. Advantages and Disadvantages of Partnership As with any level of business decision-making or economic planning, there are distinct advantages and disadvantages to any particular path that is chosen. For purposes of this brief discussion, the advantages and advantages of partnership will be related and discussed. The underlying rationale behind such a discussion is to provide the reader with a more informed understanding concerning strengths and weaknesses that the partnership agreement is able to provide to a prospective group of interested individuals. Firstly, perhaps the greatest advantage of a partnership has to do with the fact that a level of shared responsibility can be created that allows for a more efficient distribution of work tasks and project management. As the old adage goes, two heads are better than one. Additionally, further capital is available to run the entity due to the fact that both partners are personally invested in the success and business ventures that the firm will engage in. In tandem with this increase in potential capital, there is also a relative increase in the overall capacity for borrowing. For instance, an individual decides to engage in a business venture alone will only be able to leverage borrowing potential commensurate with their own debt limitations. However, when two or more individuals are engaged in a partnership, each of these individuals can leverage capital via borrowing mechanisms that allow for higher level of funding to be raised. Another potential benefit that the partnership provides is with regard to the ability of income splitting. Ultimately, income splitting is merely a mechanism through which the potential profits of the firm can be provided to various stakeholders within the partnership as income/profit the ventures that have proven beneficial. The benefit of all of this has to do with decreasing the overall tax burden is not representing a situation in which a single individual is responsible for representing all profitability and income as incumbent and contingent upon their own tax burden. Of all of the business advantages that a partnership includes, the advantage of limited external regulation is perhaps the single advantage that individuals interested in such a type of business organization reference most often in terms of a key decision factor that prompted them towards partnership. Ultimately, the lack of external regulation creates a situation in which a greater degree of time, material, and resources can be focused upon the quality of production or the quality of service that a particular business entity might be able to provide the consumer. As such, without the added headache of layers of bureaucratic red tape, the firm is able to dedicate more time and energy towards affecting the end needs of its consumers and promoting its own business interests. The final benefit with respect to partnership has to do with the fact that engaging in a partnership does not limit the overall potential for further growth or development of the organizational structure in the future. As many scholars have noted, the ability to rapidly shift between a partnership and other legal structures is relatively simple and pain-free. By means of contrast in comparison, the ability to shift between incorporation and private ownership is not something that is nearly as simple as what has thus far been described. As can reasonably be expected, there are a number of distinct disadvantages that exists with respect to partnership as well. The first of these has to do with the fact that a partnership creates a direct level of liability of all the partners for the debt that the business might incur. This liability is limited only by the overall amount of debt that exists and the number of partners and partnership. Accordingly, many individuals that might be interested in developing a partnership should be hesitant with respect to the overall level of personal liability they would be incurring as a direct result of engaging within such a level of business organization. In addition to this drawback, there is also the joint liability that exists for partnerships. In addition to the fact that each partner is liable for the debts that might be incurred by the given organization/business, each individual partners also liable for a share of the debts incurred by other stakeholders. Within such an understanding, it is patently obvious that many individuals might seek to avoid it partnership to the fact that the overall level of liability and personal financial insecurity that this particular organizational structure provides is such that it discourages many from engaging with it. Furthermore, and also on the same theme of liability, each partner is considered as an agent of the partnership and is liable for the actions of any other partners might exist within the organization. As such, the ability to be sued personally based upon the actions of other partners is something that is included within this particular form of business organization. Final drawback that exists with respect to partnership has to do with the potential that a particular apartment might believe the partnership and therefore require a complete re-analysis and redistribution of existing assets. This is not only costly, it can take a great deal of time to affect and create a situation in which profitability is harmed. Task 4: By engaging with the process of contract discharge and the advantages of legal mediation with respect to unsatisfactory work performed within the case in question, the following task will provide the reader with a thorough overview of the case and a relevant discussion of how contract law and the legal process can be employed. Unfortunately, in the case that has been mentioned, breach of contract law is something that must be considered. Ultimately, Britney paid a very high price and specified what products and services she desired; as such, this has not been fulfilled. Accordingly, there are several unique approaches under the law with respect to a breach of contract. The first of these is with respect to compensatory damages. This particular approach is the most common; in that it provides damages that are awarded by a court order to the individual that has suffered as a result of a breach of contract. More often than not, the court ultimately demands that the individual or group of individuals that are responsible for breach of contract must have sufficient money to the individual that has suffered from the breach of contract that they might engage another vendor as a function of completing the work in a satisfactory manner. Another legal approach with respect to the breach of contract is with regard to restitution. Restitution takes place in the event that a court demands that the line items that were not included within a given contract or work performed the low standards must be returned in full to the individual contracted the work to begin with. Additionally, punitive damages can also be affected by a court as a means of punishing a breaching party for willfully and knowingly abrogating the terms of a given contract. Furthermore, nominal damages and liquidated damages can be awarded in the following respective situations: when there is that a breach of contract but neither party has suffered any harm and the event that there are damages that the parties agreed to pay in the event of contract is reached. Many of these legal approaches need not be engaged by the effective discharge of a given contract. Ultimately, contract discharge refers to the process contract is completed and satisfied parties agree that work has been satisfactorily performed. In the event that a contract is not discharged by breach of contract, there are three means by which a contract to be discharged. These are: discharge by performance, discharge by agreement, and discharge by frustration. Thorough understanding of how contracts can be discharged and the means through which legal engagement can take place as a means of affecting a positive resolution to a situation should be thoroughly understood and applied with respect to any individual that seeks to engage in contract law or seeks to better understand the way in which products and services are rendered as a result of written and oral agreements. Ultimately, beginning process of drafting and agreeing upon the contract is every bit as important as the ending process through which the contract is discharged. By effectively engaging with these two steps and ensuring that each and every process is agreed upon, defined, and satisfactorily performed, stakeholders within such situations drastically diminished likelihood that brief and the necessity of the legal system to mediate disputes will ever be required. Although it is patently true that there are key situations in which the legal system must be employed and thorough understanding of how such processes are adjudicated should be engaged, the bulk of such situations are contingent upon an effective understanding of navigating the complexities of the contract in ensuring that prior to work taking place and prior to closure of the contract all necessary items have been spoken to, defined, and performed to the satisfaction of both parties; without the need for mediation within the legal sector. Read More