8PartnershipsDefinition: a business co-owned by 2 or more people who agree on how responsibilities, profits, and losses are divided
9Types of PartnershipsGeneral partnership: partners share management of the businessEach partner is liable for all business debts/losses
10Types of Partnerships (continued) Limited partnerships: partnership in which 1 person is not actively involved in the day-to-day running of the businessThis partner is only liable for what he/she has invested
11Types of Partnerships (continued) Limited liability partnership (LLP): all partners are limited partnersNot responsible for the debts and liabilities of the other partners
12Types of Partnerships (continued) Not all businesses can register as LLP’sLLP’s usually include medical partnerships, law firms, and accounting firms
13Advantages of Partnerships 1. Easy to open and close2. Few regulations3. Access to resources (money)
14Advantages of Partnerships (continued) 4. Joint decision-making5. SpecializationEach partner may bring specific skills to the business
15Disadvantages of Partnerships 1. Unlimited liabilityPartners are responsible for all of the business’s debt2. Potential for conflictCaused by more than 1 person making decisions
16Disadvantages of Partnerships (continued) 3. Limited lifeWhen a partner dies, retires, or leaves, the partnership ends
17Questions1. Explain how a sole proprietorship rests on the principles of free enterprise.
182. If you were looking to form a partnership, what traits would you want in a partner? Name 5 traits (and no…good looking doesn’t count).
193. Ideally, would a major retail or manufacturing business work as a partnership? Explain why or why not.
204. Name 2 types of businesses that would thrive as sole proprietorships.
215. Name 2 types of businesses that would thrive as partnerships.