Do You Prefer Partnership To Other Form Of Business Organization?

Partnership is preferred to other forms of business due to the following advantages point.    1. Ease of organization  Partnership can be organized without any legal formalities. There is no license fee, registration, no formal documents, no registration fee for the formation of this type of organizations. Two or more persons may star this type of business at any time.                                    2. Sufficient capital  In the soul proprietorship the capital remains limited but this problem does not arise in the partnership firm due to number of partners i.e. 20 in ordinary business and 10 banking business.    3. Borrowing Facilities  The partnership firm is considered safe organization for providing credit facilities due to unlimited liability of partners. The sufficient funds in terms of credit can be procured from financial institution or other sources in time of need.    4. Combined Abilities  A firm may enjoy the combined abilities of several heads. There may be different abilities of partners i.e. Purchaser administrator, accountant and technician. So the firm is in a position to utilize their services for productive purposes.    5. Skilled workers  As the firm enjoys larger financial sources therefore, it is possible for the organization to hire the services of qualified and confident persons for indefinite period of time. Thus capital and financial sources of a may be utilized maximum in profitable sector.

The partnership is the form of organization in which the partnership is the relationship between two to fifty persons who agree to run a common business with the view to earn the profit. The main reasons of the preference of partnership over the other forms of business ownership are;
The partnership is easily to format and organized. The partner enters into a partnership agreement and start business. The partnership enjoys a better credit rating in the eyes of creditors. As the liability of each partner in the organization is unlimited, the financial institution can safely advance loan to the firms. Partnership can bring more capital for the business by the joint efforts of the partners. The partnership is normally in strong position to raise capital and expand the business. The profits of a registered firm, after payment of super tax, are divided among the partners. They pay tax to the government on their shares to profit. The partnership can also be legally dissolved without much difficult by mutual consent of the partners or in accordance with a contract by the partners.