What is a partnership? List three advantages and three disadvantages of the partnership form of business organization
A partnership is a voluntary association of two or more persons who co-own a business for profit.
Advantages: Unlike a corporation, a partnership is easy to form, involves no legal procedures, and is less expensive to form. A partnership brings together capital and expertise of two or more individuals. Finally, partnerships pay no income taxes as corporations do.
Disadvantages: Some disadvantages of a partnership are mutual agency, which allows each partner to sign contracts in the name of the partnership, and unlimited liability, which makes each partner individually liable for all the debts of the partnership. Additionally, the limited life of a partnership requires a new agreement whenever there is a change to the existing partnership.
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