7 organisation_partnerships - tutor2u GCSE Business Studies...

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tutor2u GCSE Business Studies Business organisation – Partnerships A partnership is a business where there are two or more owners of the enterprise. Most partnerships are between two and twenty members though there are examples like John Lewis and some of the major world accountancy firms where there are hundreds of partners. A partner is normally set up using a Deed of Partnership . This contains: f Amount of capital each partner should provide (i.e. starting cash). f How profits or losses should be divided. f How many votes each partner has (usually based on proportion of capital provided). f Rules on how to take on new partners. f How the partnership is brought to an end, or how a partner leaves. The advantages of a sole trader becoming a partnership are: 5 Spreads the risk across more people, so if the business gets into difficulty then there are more people to share the burden of debt 5 Partner may bring money and resources to the business (e.g. better premises to work from) 5
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