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Partnership
According to Partnership Act 1891 ( SA ), partnership is a business setup and run by two or more people and less than a certain number of people with a view of profit 1. And Partnership consists of limited partnership and general partnership. The following discussion is focus on general partnership.
Advantages:
Simple to establish
When a partnership need to be setup, if it can satisfy four elements which is ” business, carrying on, in common and view to profits ”, the Partnership is setup successfully without the need of registration ( Re Megevand 2). No special laws about its establishment.
More attractive to raise fund
As the partnership is obligated by every partner, it is much easier to run the business and face some financial problems. Also, every partnership could contribute capital to the business.
Better management and more brainstorming
It is possible that every partnership is good at different areas so that they can offer different ideas to the business management. Also, this can save money for partnership instead of hiring too many people. For instance, if one of the partner is an accountant, he/she could deal with the accounting problems.
1
2
Partnership Act 1891 (SA), s1 (1)
Re Megevand :Ex parte Delhasse (1877-78) 7 Ch D 511
Flexibility
There are no specific laws for partnership of running the business. The rules are based on the partners’ agreement. When they get a new partner, they all have the chance to change the old agreement. This advantage gives the partners a flexibility to change of their obligations and rights during the partnership. For instance, if some of partners are unhappy about the sharing of the profits or losses, they could have a meeting and discuss how to improve it.
Separately legal entity and low tax payment
Because partnership is not a legal entity, it has no need to pay a tax. The partners only have to pay their personal income tax after gaining the
Partnership
According to Partnership Act 1891 ( SA ), partnership is a business setup and run by two or more people and less than a certain number of people with a view of profit 1. And Partnership consists of limited partnership and general partnership. The following discussion is focus on general partnership.
Advantages:
Simple to establish
When a partnership need to be setup, if it can satisfy four elements which is ” business, carrying on, in common and view to profits ”, the Partnership is setup successfully without the need of registration ( Re Megevand 2). No special laws about its establishment.
More attractive to raise fund
As the partnership is obligated by every partner, it is much easier to run the business and face some financial problems. Also, every partnership could contribute capital to the business.
Better management and more brainstorming
It is possible that every partnership is good at different areas so that they can offer different ideas to the business management. Also, this can save money for partnership instead of hiring too many people. For instance, if one of the partner is an accountant, he/she could deal with the accounting problems.
1
2
Partnership Act 1891 (SA), s1 (1)
Re Megevand :Ex parte Delhasse (1877-78) 7 Ch D 511
Flexibility
There are no specific laws for partnership of running the business. The rules are based on the partners’ agreement. When they get a new partner, they all have the chance to change the old agreement. This advantage gives the partners a flexibility to change of their obligations and rights during the partnership. For instance, if some of partners are unhappy about the sharing of the profits or losses, they could have a meeting and discuss how to improve it.
Separately legal entity and low tax payment
Because partnership is not a legal entity, it has no need to pay a tax. The partners only have to pay their personal income tax after gaining the