Question

State four advantages of partnerships over sole proprietorship.

Answer 1

1. A partnership may be able to raise more capital than a sole proprietorship.
2. Sharing of ideas between partners produces better results as opposed to sole proprietorship where there is only one person to make all the decisions.
3. In partnership losses are shared among partners when they occur while a sole proprietor breaks all losses alone.
4. There is sharing of work among the partners make use of each others expertise as opposed to a sole proprietor who performs all the duties alone.
5. In partnerships there is combining of talents, from the different partners as opposed to sole proprietorship.