Chapter 8, Problem 21AA

To determine

To evaluate the reasons behind people favor of a partnership rather than a sole proprietorship.

Explanation of Solution

Organizational partnerships benefit from large wealth rather than sole control, and they can expand the scale of operations to sustain regional economies. As capital needs increase, more partners can be brought into partnership. The alliance companies may also organize money outsourced.

Partnership arrangement of a company profits from the knowledge, experience and abilities of the partners. This is the distinctive benefit arrangement that the sole proprietor enjoys, as this is accomplished by shared consultation.

Any loss suffered by the corporate that shall be borne equally by all partners to the degree that each partner's burden is much lower, while the sole proprietor had to suffer the loss inthe business entirely.

Economics Concept Introduction

Introduction:   Partnership companies share mutual liability and meet periodically. This makes them decide easily, which is conducive to leveraging unexpected opportunities.