Question

Mention any four merits of partnership firms.

Answer 1

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Merits of partnership firm


1) Easy to start and dissolve
A partnership firm can be setup easily and quickly. There is not much legal formalities and expenditures are involved in the establishment of a partnership. Similarly, a partnership firm can be closed down very easily and quickly.



2) Higher capital
Many partners invest capitals and there is higher flexibility in capital because new partner can be agreed to be associated and investing can be increased.



3) Higher innovation
Many partners use their own ideas and innovation capacity. So there is unlimited managerial ability



4) Reduction of work load
Partners mustn’t work more to earn more profit. Higher profit generation is important. So, there is no dull and monotonous work. In case of monotony, health problem to any partner then other partners can help and reduce absenteeism.

Answer 2

A partnership firm is defined as an organization which is established by two or more persons to earn profit.

Each member of this group is called as partner. There are lot of benefits of partnership firms.

Four of them are listed below:

i) Partnership firm is easy to establish.

ii) In partnership firms combined abilities and judgement of all partners are used.

iii) Direct motivation

iv) Close supervision