FAQs
Partnership
Whilst there can be more complex partnership structures, for the sake of time and simplicity, lets limit ourselves to the traditional partnership between two or more individuals. A partnership cannot have any more than twenty individual partners (this is rarely an issue).
Advantages
- Simple to establish with little time required to get started.
- Duties can be delegated between partners depending on each partners personal skill set.
- Flexibility to invest extra capital or withdraw previously invested capital without restrictions, except anything contained in a partnership agreement.
- Partnerships can be used for income splitting purposes between family members to create potential tax savings.
Disadvantages
- Joint and several liability of the partners.
- Admission of new partners requires the original partnership to be dissolved and a completely new partnership to be established.
- Continuity of the partnership is dependent on the existing partners staying in business together.
- Conflict can occur between partners if common business goals aren't shared.