Flashcards on Understanding Business Partnerships
Understanding Business Partnerships: A Student's Guide
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Partnerships (Business Ownership)
15 cards
Card 1
Question: What is the usual number of owners allowed in a partnership (business ownership)?
Answer: Two to twenty people (2–20).
Card 2
Question: Why is it easy to establish a partnership?
Answer: The business is not registered and very little is involved to draft a partnership agreement.
Card 3
Question: How can having 2–20 partners help the business financially compared with a sole trader?
Answer: Multiple partners can contribute more capital than a sole trader, allowing the business to grow.
Card 4
Question: How can combining partners’ skills and knowledge benefit the business?
Answer: It can create synergy and greater efficiency (1 + 1 = 3).
Card 5
Question: How does a partnership improve decision-making and responsibility?
Answer: More people can share opinions and experiences, leading to better decisions and shared responsibility.
Card 6
Question: What advantage does division of labour give in a partnership?
Answer: Each partner can do the tasks they are good at, improving efficiency.
Card 7
Question: How can partnership structure affect taxation when profit is relatively low?
Answer: Partners may be taxed at a rate lower than 28% if profit is relatively low.
Card 8
Question: Give one non-financial reason a business might offer partnership to someone.
Answer: A partnership may be offered to a valuable employee to retain them in the business.
Card 9
Question: How can forming a partnership reduce harmful competition?
Answer: Different sole traders can join a partnership, eliminating harmful competition between them.
Card 10
Question: What is a disadvantage of a partnership related to business registration and ownership separation?
Answer: The business cannot be registered, so there is no separation between the owners and the business.