Advantages and Disadvantages of Partnership Assignment - 1

Advantages and Disadvantages of Partnership - Assignment Example The author of the paper states that perhaps the greatest advantage of a partnership has to do with the fact that a level of shared responsibility can be created that allows for more efficient distribution of work tasks and project management. As the old adage goes, two heads are better than one. Additionally, further capital is available to run the entity due to the fact that both partners are personally invested in the success and business ventures that the firm will engage in. In tandem with this increase in potential capital, there is also a relative increase in the overall capacity for borrowing. For instance, an individual decides to engage in a business venture alone will only be able to leverage borrowing potential commensurate with their own debt limitations. However, when two or more individuals are engaged in a partnership, each of these individuals can leverage capital via borrowing mechanisms that allow for a higher level of funding to be raised. Another potential benefit that the partnership provides is with regard to the ability of income splitting. Ultimately, income splitting is merely a mechanism through which the potential profits of the firm can be provided to various stakeholders within the partnership as income/profit the ventures that have proven beneficial. The benefit of all of this has to do with decreasing the overall tax burden is not representing a situation in which a single individual is responsible for representing all profitability and income as incumbent and contingent upon their own tax burden.  Of all of the business advantages that a partnership includes, the advantage of limited external regulation is perhaps the single advantage that individuals interested in such a type of business organization reference most often in terms of a key decision factor that prompted them towards partnership. Ultimately, income splitting is merely a mechanism through which the potential profits of the firm can be provided to various stakehold ers within the partnership as income/profit the ventures that have proven beneficial. The benefit of all of this has to do with decreasing the overall tax burden is not representing a situation in which a single individual is responsible for representing all profitability and income as incumbent and contingent upon their own tax burden.