Question

parul is doing an export business. everytime she would procure an export order she felt stressed and had an anxiety about completing it on time. few years later, her younger sister esha, after completing her course in fashion designing, joined her in business as a partner. consequently parul realized that her level of stress and anxiety related to business operations had reduced considerably and she had started feeling more relaxed. however, at the same time she noticed that since both of them differ in their choice of colours for making garments lot of time is being wasted in reaching a mutual consent.

a) identify and explain the related merit of partnership being highlighted in the paragraph.
b) also, state the related demerit of partnership being described in the paragraph

Answer 1

Answer:

a.Partnership is a contract between two or more like-minded persons that have mutually decided to share the profits and losses by conducting a lawful business.

Ease of Formation:

It is easy to form a partnership. No elaborate legal procedures are needed to bring a firm into existence. There is no need for registering a firm. Even when required, a firm can be registered quite easily. Likewise, one can close down a firm relatively easily.

.

Explanation:

Answer 2

The merit of partnership followed is the reduction of workload, while the demerit is slower and difficult decision making.

Reduction of workload -

• Partners don't need to struggle any harder to make more income. It's necessary to generate greater profit. Therefore, there is no boring, monotonous work.

• Since Parul had a new partner Esha, her stress was significantly used.

Slower and difficult decision making

• When one is not a sole trader, they lose autonomy. Differences may not be instantly apparent.
• The interests of partners, personal circumstances, and priorities that shift over time and the fact that they are compatible at the outset do not emerge early.
• Parul realised that they have a different mindset and are not able to come at the same conclusion regarding colours, which in turn wasted a lot of time.