a. Victor and Samba have been partners for two years. They have had disagreements throughout...
a. Victor and Samba have been partners fortwo years. They have had disagreements throughout the period and Samba requested for a dissoultion of the partnership so that he could start a sole proprietorship.
Statefive problems Samba could face as a sole trader
b. Victor and Samba have been partners fortwo years. They have had disagreements throughout the period and Samba requested for a dissoultion of the partnership so that he could start a sole proprietorship.
Statefive benefits Samba could enjoy if he remained in the partnership
Explanation
a -Unlimited liability: the partners are liable to the debts of the business to no limit.
- Difficulty in management: decision-taking is going to be long and slow as every partner would want their voice to be heard, thus, creating disagreement.
- Inability to raise sufficient capital: partners cannot invite the public to raise capital, and because of its unlimited liability, members fear to invest in partnership.
- Risk of dissolution: the partnership stands dissolved at the death, bankruptcy ot insanity of a member.
- Action of one partner on others: there is the danger that one reckless partner can ruin others.
b - Large amount of capital is necessary for the business as a limited company.
- The success of the business requires the skill or knowledge of experienced members of the partnership/joint decision, for example, solicitors, doctors etc.
- The ownership and control should not be extended outside a family or friends.
- Partnership is suitable for executing short term value.
- Shared resources the partnership would provide access to shared resources, including capital, expertise, network, and assets.