to form – In
partnership business there are no licit conditions and no need to get the firm
registered. Through a simple agreement, is enough to create a partnership
business either oral or in written.
of resources – Trough
two or more partners decide to begin Partnership business then will lead to be
able to gain more money and
resources .so partners are able to contribute more capital, time and effort towards
3. Great decisions – All partners are
the owners and have equal power of the business. Every partner has responsible
and right to partake in the management of the partnership business. Such as,
solve the problems and participate in decision-making in order to make right
4. Flexibility – Actually Partnership has
flexibility in operations and at any time the partners can decide to change the
nature of business without any legal system. But need the assent of all the partners
is required in order to make any change.
5. Risks sharing– Business risks can be shared by partners of the business in order to
continue the business.
of specialization – In
a partnership partners can impart their business knowledge and experience among
other partners in order to succeed.
1. Unlimited Liability- The partners are
separately or jointly liable for the
of the company to an unlimited degree. Therefore, partners can share the
liability among themselves.
2. Uncertain Life – In a partnership
business has no legal nature. Moreover, partners might have to face with the death
or the retirement of any partner in the business and any dissenting partner can
vacate the partnership.
3. Lack of Unity- Any partner can
place viewpoints or opinions in the partnership business. This will leads to
make a possibility of quarrel among them.
4. No transferability of
cannot transfer their own share of interest without the permission of other
partners of the business.
liability- The partner’s liabilities for the obligations and debts of the
limited liability company are limited to their own investment in the business.
taxation- Income from limited business can be treated as own personal
income, and it is not subject to certain federal taxes.
Allocation- partnership business losses and profits can be given to
partners regardless of the counting of initial investments in the business.
management- limited liability company is not required to have a strict
books, annual meetings, or board of directors requirements within the company. Therefore
partners can run business on partners own terms and regulations.
In this brand name is registered under legal procedure and no other restaurant
or company can use this registered brand name.
Higher Costs –
limited liability companies should typically pay more fees to file as limited
liability companies compared to partnership business. So in addition, require
yearly renewal fees and have to adhere government regulations as well.
company may actually end up paying more that it would with a different model,
through,LLCs allow owners to avoid federal taxes depending personal income tax
requirements and the nature of the business.
my opinion limited company is the best business ownership type for Fernando and
Actually if Fernando and Perera decided to form
limited liability company and after sign
a guarantee, they don’t need to personally responsible for their business. Simply
means creditors can only take access to
their business assets and savings, but not their personal property as well. Alike
if a customer sues their Colombo restaurant when, slipped or fell on their flooring or claiming restaurant
food made customer sick or any number of
things, an LLC can help protect FERNANDO and PERERA personal assets from risk.
With an LLC, your business credit is more likely
to be taken into consideration and can be shown as an alternative to, or in
addition to, your personal credit. Your restaurant as an LLC will have its own
credit rating, in the same way individuals have credit scores. This may benefit
your restaurant if you want to expand it, purchase new equipment, open a second
location, remodel or any number of things that will help your business grow but
may take financing.