Answer:
Partnership:
Partnership can be understood as agreement between two or more person in order to carry on business to earn profit. Partners are considered as joint owners and have equal controlling rights over its management. Profits are shared as per partnership deed and in absence of deed profit is signed equally.
Joint and several Liabilities of partners:
Joint and several Liabilities of partners mean that third party can sue all the partners of the firms either jointly (together) or individually. All the partners can be held liable regardless of the fact that the respective partner has not participated in conduct nor have knowledge of conduct.
It has been considered as disadvantage as third part has right to sue firm and all the partners whether they are involved in conduct or not.
Answer:
Partnership:
Partnership can be understood as agreement between two or more person in order to carry on business to earn profit. Partners are considered as joint owners and have equal controlling rights over its management. Profits are shared as per partnership deed and in absence of deed profit is signed equally.
Joint and several Liabilities of partners:
Joint and several Liabilities of partners mean that third party can sue all the partners of the firms either jointly (together) or individually. All the partners can be held liable regardless of the fact that the respective partner has not participated in conduct nor have knowledge of conduct.
It has been considered as disadvantage as third part has right to sue firm and all the partners whether they are involved in conduct or not.
Answer:
Limited partnership:
A limited liability is one of the forms of business organization which consist of at least one general partner and more limited partner. Here general partner is necessary for the managing the firm and is held personally liable for all the debts of firms while limited partner only contribute capital to the firm and is not held personally liable for the debts of the firm beyond the amount of investment.
Advantage of limited partnership over general partnership:
1. Limited liability
The major advantage of the limited partnership is limited liability which means that partners can be held liable only to the extent of their amount contributed. In this business structure, partners not personally liable.
2. Flexibility:
Another advantage of limited partnership is that it provides flexibility to the firms regarding management and tax.