Business Studies, asked by PragyaTbia, 1 year ago

Define partnership firm. Explain its merits and demerits.

Answers

Answered by radhekrishan8888
10
partnership is a firm in which two and more than two person start a business.
merits
.easily to stabilize
.maximize the profit
demerits
.bias
.lack of continuity
Answered by yattipankaj20
12

Answer:

As per the question

Partnership Firm : A partnership is an unincorporated business owned by two or more partners A partnership often is referred to as a firm

* Partnership firm is an agreement between two or more persons who have  agreed to profits and losses of the business carried on by ball or any one of them acting upon all. " -as per Sec ( 4 ) . partnership act 1932.

Merits of Partnership Firm :

Easy information : registration or incorporation is not required in case of partnership firm LLP or company. it can be formed without any legal  formalities and expenses . they are simple and economical to firm

Large resources : Due to more number of partners the partnership firm has larger resources for business operations as compared to sole proprietorship firm

Flexibility in operation : Due to limited number of partner there can amend any objectives or change any operations any time by mutual consent

Sharing: In partnership every partner bears the risk individual as it is easier compared to sole proprietorship

Demerits of Partnership Firm :

Instability : a partnership firm does not exists for an indefinite period of time the death insolvency or lunacy of a partner may lead to dissolution of the partnership firm

Limited Capital : due to restriction on the maximum number of members, a limited amount of a capital can be raised

No legal status : A partnership firm does not have a legal status like a joint status like or LLPr company

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