Question

Sara wants to start her own business. She is not sure if she wants to be a sole proprietor or get a partner. She asks a financial adviser about the different ways in which she might finance her company. What would an adviser tell her is a disadvantage of getting a partner?

Answer 1

Sara would have to share profits with her partner.

Step-by-step explanation:

A partnership business is found b more than two members who share profits and management. Partnership business can be of four types, namely, partnership, general partnership, limited partnership, and limited liability partnership.

Partnership businesses have a number of disadvantages,

1. Limited partners mean a limited amount of capital
2. Each partner has unlimited liabilities
3. Decision making takes more time
4. Profits are shared among the partners
5. Shares cannot be transferred without the consent of the existing partners.