What Are Four Factors That Affect Continuity Of A Partnership?


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Matt Domm answered
Assuming you are talking about a business partnership conflict of interest, liability, type of partnership, and a desired end to the partnership can all affect the continuity of business.
Conflict of interest can arise between the partners in a small business. It may arise because one partner wants to expand while the other is not sure it is time for that expansion. Conflicts of interest can arise in any partnership no matter how good the relationship starts in a business. This is simply human nature.
Liability is another factor that can play a huge role in the partnership continuing or not. Liability means the company may be responsible should something go wrong and they are found negligent. In other words, a company has liability insurance to protect against claims, but when it is not enough there can be issues such as having to fund a lawsuit. This lawsuit funding could be the end of a partnership based on cash flow needs.
The type of partnership whether it is general, limited, or limited liability can affect how far a company can get. Each one of these types of partnerships has a specific use in order to form a partnership company. Under law a partnership must follow the specific use and laws associated with that type of partnership. It is possible to file for a change of type of partnership or even to become a sole proprietor business should the partnership need to be dissolved.
There are many reasons why dissolution of a partnership in business may occur. One would be the conflict of interest. Another reason is related to one or more partners wishing to retire or sell. The partnership would need to be ended. It would be up to the existing partner as to whether the other half of the business could be sold.

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