Question

partnership firm have several benefits compare to sole proprietorship. explain

Answer 1

The following are the advantages that a partnership firm enjoys as compared to sole proprietorship form of business.

1) Balanced decision making - In partnership. decision are made collectively by all the partners. This results in consolidated efforts by all the partners in the decision making rather than a single person's efforts in case of sole proprietorship form of business.

2) Risk sharing - All partners share the business risk as compared to risk borne by a single person in case of sole proprietorship.

3) Pooling of capital - Funds are pooled by all partners in partnership as compared to the capital contributed by a single person contributing all the capital in case of sole proprietorship.