IGCSE, A Level Business Student Forum

Syed Raza wrote: ↑Tue Oct 31, 2023 8:50 pm [KN] Conflicts may arise
[AN] Differences on opinions and conflicts may also arise which can lead to disruptions as partners wont be ready to cooperate with each other.
[AN+] Thus Decision making may become slower and less efficient.

[KN] Profit Sharing
[AN] partnerships involve sharing profits with other partners, which means that individual partners may receive a smaller share of the business's profits compared to another partner who is receiving higher in amount.
[AN+] Thus leads to conflicts and business may shut down due to this

lack of direction/impact of knowledge point being demonstrated here

Talha Asim wrote: ↑Fri Nov 03, 2023 12:14 am (Kn) profits shared (an) unlike in the case of a sole trader who gets to keep all the profits, in a partnership, the profits are divided among the partners (an+) this can discourage further investment as whatever the business makes is just divided

(Kn) longer decision making time (an) in a partnership business all the partners must be consulted with before taking a decision and all the partners myst agree on it (an+) such can take up alot of time which results in inefficiency

lack of direction in both analysis points being demonstrated here, rather its just an explanation to its respective knowledge point

Hussain Asghar wrote: ↑Tue Nov 07, 2023 11:48 pm [KN] profit shared
[AN] In a partnership, all partners are owners of the business, and so, are entitled to a share of the profits earned by the business.
[AN+] this would lead to low motivation to work for the business

wheres the 2nd point

[Kn]Profit Sharing
[An] Since partners are required to split profits, each partner's portion may be smaller than if they were a lone proprietor.
[An+] thus there dividends are low which means capital reinvestment is low

[Kn]Shared Responsibility for Partner conduct
[An]Regardless of whether a partner knew about the other partner's conduct or made a mistake, they can all be held responsible for them.

[kn] conflicts
[an] partners may not see eye to eye on some occasions and decisions regarding the business
[an+] leads to a delay in the decision making process

[kn] unlimited liability
[an] personal property of a partner might be confiscated to settle partnership debt
[an+] increased burden and instability in the businesses future

KN: Conflict of Interest
AN: Disagreements among partners can arise, leading to conflicts that may hinder decision-making and overall business operations
AN+: Thus decisions during the conflict may be harmful to the business
KN: Limited Capital
AN: Partnerships may find it challenging to raise capital compared to larger corporate structures
AN+: limiting growth opportunities

(Kn) conflicts (an) due to there being more then one person controlling the business there can be differences in their decisions or opinions (an+) hence it can create a loss in the business.
(Kn) profit being shared (an) as there are more owner in the business it means more people which the profit will be divided amongst (an+) hence it decreases profit that can be reinvested into the business.

KN: Slow Decisions
AN: Big decisions need everyone to agree, which can make it slow to decide things compared to other business
AN+: Thus delaying decisions can be harmful for the business
KN: Potential Conflicts
AN: Differences in opinions and working styles among partners may lead to conflicts
AN+: affecting the overall harmony within the business

[KN] delay in decisions
[AN] Thus there will be a reduction in productivity
[AN+] Hence the business won't perform to its full capacity and the competitors will have an edge over the business

[KN] Too many opinions
[AN] leading to misunderstanding and conflicts
[AN+] hence lack of growth and instability

(KN) doesn't have limited liability
(AN) due to this if the business fails the partners will still be responsible for the debts needed to be paid to the creditors,
(AN+) thus due to this, the creditors could still force the partners to sell their business to pay off the debts of the business due to unlimited liability of the partners.

(KN) partnership doesn't have a separate legal identity
(AN) due to this if one partner was to die because of some accident, even though the other partner still has control over the business in some ratio, the business partnership would end,
(AN+) thus due to this in the long run the business may fail due to the partnership ending leading to the it's downfall.