What is the advantages of a partnership over a sole proprietorship?

Question

What is the advantages of a partnership over a sole proprietorship?

Answer 1

There are quite alot of advantages of partnership.

Firstly, your partners and you can share the workload.  If your partner happens to be an Accountant and you have some business-law skills, both of you can share your expertise.

Secondly, raising capital is easier than raising oneself (Sole Proprietorship, which you're alone).

And I totally disagree with the other guy's answer about limited liability.  Because there are 2-types of partnership - General and Limited Partnership.

In limited partnership, it's like what the other guy said - you will lose what you have plough into the business.  But for general partnership, you will have unlimited liabilities - you will lose and will be in deep debts, which would resort you to sell your private property (like your house, etc) to pay up the debts, just like Sole Proprietorship.

And in Limited Partnership, you need at least one GENERAL partner who will be liable for all debts personally.

For more info, read up the info in wiki:

Limited Partnership:

http://en.wikipedia.org/wiki/Limited_lia...

General Partnership:

http://en.wikipedia.org/wiki/General_par...

Answer 2

Well, on a basic level, in a partnership, you can only lose what you put up. The liability for the enterprise is limited to what you actually invested in the first place, you and your partner. A sole proprietorship basically means you are self employed and so what ever debt you might accumulate, you will have to pay it all back. A partnership is a bit like a limited company, just without so much of the red tape. I think that is the main difference, other than having somebody who you can trust as opposed to going it alone, though that is pretty obvious.