Advantages of Partnership

There are many merits or advantages of partnership. We can throw light on main and important merits or advantages of partnership. Partnership is preferred to others forms of business due to following reasons :

1. Easy Formation :-
It can be easily organized without any legal formalities. Two or more persons may start the business at any time, its registration is also very easy.

2. Joint Efforts :-
All the partners work jointly to improve the business. The firm distributes the work among the partners according to their ability and experience. It increases the efficiency of the firm.

3. Larger Capital :-
Partnership can collect more capital in the business by the joint efforts of the partners. In the sole proprietorship the sources and capital remains limited.

4. Easy Borrowing :-
The liability of the partners is unlimited this business. So the bank and other financial institutions provide the credit easily.

5. Tax Facility :-
In this business every partner pays tax individually. So the firm is in a better position as compared to the joint stock company.

6. Public Confidence :-
Public shows more confidence on partnership as compared to the sole proprietorship. If the firm is registered people feel no risk in creating relation with such business.

7. Minority Protection :-
In this business all the policy matters are decided with the consent of each partner. So there is a protection of the minority partners.

8. Flexibility :-
It is a flexible organization and partners can change their business policy with the mutual consultation at any time.

9. Expansion of Business :-
The business volume can be expanded easily because there are large number of partners and unlimited liability of each partner.

10. Secrecy :-
In this business there is no need to publish its accounts. So the business secrecy remains confined within partners.

11. Skilled Worker :-
In this business a firm can hire the services of qualified and competent persons due to strong financial position. It increases the profit of the firm.

12. Sense of Responsibility :-
In this business the liability of the partner is unlimited. So every partner performs his duties honestly and Efficiently.

13. Distribution of Loss :-
If a firm suffers a loss it is distributed money all the partners. So no any single person bear all the loss.

14. No Risk of Fraud :-
In this business each partner can look after the business activities and can also check the accounts. So there is no risk of fraud.

15. Simple Dissolution :-
Partners may dissolve their business any time. There is no need of legal formalities.