Characteristic of partnership
Identify and explain any FOUR (4) characteristics of a partnership.
A partnership means a business is founded by two or more individuals, for example like small businesses which including retail or services business. There are certain characteristic for partnership, the first characteristic is partnership is limited life. Partnership may only established in certain year based on the partnership agreement. Partnership is easy to be terminate if one of the partner is death, bankruptcy or do not carry out certain responsibility if there is no such agreement is made. When a partner is being withdraws or added, the business should make a new partnership agreement if they wish to continue operate in partnership. This partnership's business can be continue if with proper provisions and termination or withdrawal of partner in a partnership will not bring a big impact toward ongoing business operations.
In a partnership, partners are agents, so that it is mutual agency. A partner may legally bind to the partnership agreement that in line with the partnership's operations. Before start a partnership, it is very important to know their potential partnerships is because most partnerships agreement create unlimited liability for its partners. A partner may limit another partner's ability enter into contracts on the company's behalf, however this limitation is only applies if the third party is aware of the limitation. It is their responsibility to inform third parties regarding the ability of their partner which is limited enter into contracts.
Third, partnership is unlimited liability, this is because partners involved may use their personal assets to fulfill the partnership debts when the partnership cannot achieve its obligations. A partner may held individually for liable to the payment of creditor if another partner is insufficient assets to meet the share of the partnership's debt. General partnership is mean a partnership which all of the partners are individually
A partnership means a business is founded by two or more individuals, for example like small businesses which including retail or services business. There are certain characteristic for partnership, the first characteristic is partnership is limited life. Partnership may only established in certain year based on the partnership agreement. Partnership is easy to be terminate if one of the partner is death, bankruptcy or do not carry out certain responsibility if there is no such agreement is made. When a partner is being withdraws or added, the business should make a new partnership agreement if they wish to continue operate in partnership. This partnership's business can be continue if with proper provisions and termination or withdrawal of partner in a partnership will not bring a big impact toward ongoing business operations.
In a partnership, partners are agents, so that it is mutual agency. A partner may legally bind to the partnership agreement that in line with the partnership's operations. Before start a partnership, it is very important to know their potential partnerships is because most partnerships agreement create unlimited liability for its partners. A partner may limit another partner's ability enter into contracts on the company's behalf, however this limitation is only applies if the third party is aware of the limitation. It is their responsibility to inform third parties regarding the ability of their partner which is limited enter into contracts.
Third, partnership is unlimited liability, this is because partners involved may use their personal assets to fulfill the partnership debts when the partnership cannot achieve its obligations. A partner may held individually for liable to the payment of creditor if another partner is insufficient assets to meet the share of the partnership's debt. General partnership is mean a partnership which all of the partners are individually