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Finance & Accounting
Pages 4 (1004 words)
The partners of Samanta Shoes know that knowledge of partnerships and their financial implications are important to success. What are some of the advantages or disadvantages of the partnership form of business?
Partnership is the mutual consent of two or more people when they join in together to pursue a common goal or interest. Within a business, a partnership is formed in order to certain activities that may result in the benefit of all the partners of the organization. The advantages and the disadvantages of a partnership are presented below: Advantages One of the greatest advantages of a partnership is that it does not have to be registered with the State of the country in which it operates; hence this saves the cost of the registration fees. The investment/capital is shared. The responsibility to run the partnership is shared amongst the partner resulting in sharing skilled expertise and knowledge Disadvantages Partnerships are usually bound to result in unlimited liability for the partners Risk of disagreement amongst partners Partners need to focus on the working pattern, profit sharing ratio and the work that each of the partner would be assigned. 2. Identify and discuss the key differences between common and preferred stock. Companies usually issue two different types of stock, common and preferred. The major difference between common and preferred stock is that common stock results in ownership for the buyer whilst a preferred stock does not. The common stock is traded within the stock market within a country, preferred stock, on the other hand are not traded within such markets ...
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