I to B: Advantages of Partnership


More capital available

Partners are able to arrange larger amounts of capital than the sole trader business. Partnership has more capital because the partners invest their money into the business. Other than that the banks tend to give loan facility to the partnership on relaxed terms, whereas the sole trader has to provide security and also fulfill many bank requirements.

More ideas

The business is able to gather more ideas if it is operating as a partnership. The partners can give their unique ideas regarding an issue. Most of the times the ideas facilitate the business to make informed decisions.

Losses are shared

If the business suffers losses then the partners have to share the losses equally. The partners have to share the loss even if the loss was due to the decision made by one partner. Partners are held responsible for the acts of each other. If the business suffers a loss of $10,000 and there are 5 partners then the each partner will have to suffer a loss of only $2000 each. If the sole trader suffers a loss of $10,000 then he or she will have to bear the entire loss.

Tasks are divided

Tasks are divided among the partners. In the sole trader business the sole trader has to perform all the tasks by himself, but in the partnership the partners can divide the tasks between them.


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