1. Essential Question: Partnerships SECTION 2
Explain the difference between a partnership and a sole proprietorship, compare and contrast General Partnerships vs. Limited; and list the pro’s and con’s of partnerships as a business organization.

2. Partnership vs. Sole Proprietorship:
SECTION 2
Partnerships
Partnership vs. Sole Proprietorship:
Business is owned by two or more people
Usually occur when two individuals do not have the required capital or business skills individually
Partnerships can vary in terms of partner roles and responsibilities

3. Advantages of a partnership:
SECTION 2
Partnerships
Advantages of a partnership:
easy to form
allow specialization- Each partner has specific knowledge that improves the business that the other lacks
lets partners share decision making (although can create tension)
shares business losses between partners

4. Disadvantages of a partnership:
SECTION 2
Partnerships
Disadvantages of a partnership:
unlimited liability by partners- business can fail for one partners mistake yet other partners share in the fall out
potential for conflict among partners- often one partner attempts to take on the role of Sole Proprietor despite equal investment
lack of business longevity- partners burn out

5. Differences between general partnerships and limited partnerships:
SECTION 2
Partnerships
Differences between general partnerships and limited partnerships:
General partnerships:
Partners have equal decision-making authority.
Each partner has unlimited liability- If business goes into debt, general partners split debt equally

6. Differences between general partnerships and limited partnerships:
SECTION 2
Partnerships
Differences between general partnerships and limited partnerships:
Limited partnerships:
Partners join as investors- provide capital and receive percentages of profits
Partners have an inactive role in decision making.
Partners have limited liability if the business goes into debt, limited partners are not responsible for debt.