Outline the disadvantages of partnerships – NABTEB QUESTION

The disadvantages of a partnership are:-

i. Disagreements on some issues can affect the smooth running of the business.

ii. The death of a general partner could dissolve the partnership.

iii. There is an unlimited liability because where the business is bankrupt, partners will lose capital contributed and personal properties.

iv. In general partnership, the misconduct of a partner will affect all others.

v. A partner cannot make a secret profit.

vi. There is limited capital when compared with companies.

vii. Introduction of a new partner may end the business.

viii. There is always a slow decision-making process.

ix. The partners do not show the type of excitement and enthusiasm a sole proprietor will show to his business. There is therefore a decrease in personal interest.