define partnership firm explain its merits and demerites
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Partnership is a voluntary association of two or more people who contributes skill and time for carrying on a lawful business for their benefits. It is the second stage in the evaluation of commercial organization.
Merits :
- Easy formation
- Business Secrecy
- Limited Government control
- large capital
- Flexibility in operation
- Easy dissolution
- Effort-Reward Relationship
Demerits :
- Limited Membership
- Unlimited Liability
- Lack of Stability
- Problem of Continued Existence
- Lack of Public Confidence
- Difficulty in admitting new partner
- Difficulty in Transfer of shares
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