Write short answer of the following.
State the merits of partnership firm.
State the merits of partnership firm.
The following are the merits of a partnership firm:
i. Secrecy of information: It is not mandatory for a partnership firm to publish its annual accounts. A partnership firm can thus, maintain complete secrecy of its information.
ii. Easy formation: A partnership requires an agreement (oral or written) between two or more partners. This eases its formation.
iii. Risk sharing: The risks in a partnership firm are shared jointly by all partners. This reduces the burden on each partner.
iv. Balanced decision making: Decision making is balanced, as all decisions are taken collectively by all partners.
v. Simple dissolution: The partnerships are easy to dissolve as the dissolution requires either a 14 day notice by any of the partners or the completion of the specified time period for which the partnership was formed.
vi. Greater flexibility: A partnership firm enjoys greater flexibility because not many restrictions are laid down under the Partnership Act.
i. Secrecy of information: It is not mandatory for a partnership firm to publish its annual accounts. A partnership firm can thus, maintain complete secrecy of its information.
ii. Easy formation: A partnership requires an agreement (oral or written) between two or more partners. This eases its formation.
iii. Risk sharing: The risks in a partnership firm are shared jointly by all partners. This reduces the burden on each partner.
iv. Balanced decision making: Decision making is balanced, as all decisions are taken collectively by all partners.
v. Simple dissolution: The partnerships are easy to dissolve as the dissolution requires either a 14 day notice by any of the partners or the completion of the specified time period for which the partnership was formed.
vi. Greater flexibility: A partnership firm enjoys greater flexibility because not many restrictions are laid down under the Partnership Act.
