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 Form 2 Business Studies: Forms of business units lessons

Disadvantages of partnership.

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Answer Text:
Disadvantages of partnership.
(i) A mistake made by one of the partners may result in losses which are shared by all the partners.
(ii) Continued disagreement among the partners can lead to termination of the partnership.
(iii) Decision-making is slow since all the partners must agree.
(iv) A partnership that relies heavily on one partner may be adversely affected on retirement or death of the partner.
(v) A hard working partner may not be rewarded in proportion to his/her effort because the profits are shared among all the partners.
(vi) There is sharing of profits by the partners hence less is received by each partner.


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