Business Pros and Cons of Partnership As Essay

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Business

Pros and Cons of Partnership as a form of business

Partnership is a form of business where one or more individuals come together for the realization of a common economic goal. As with other forms of businesses, there are numerous pros and cons that come with it. One of the primary advantages is the pooling of resources that can be used for the achievement of the common goal. These common resources can include capital as well as skills needed for the successful execution of the business objectives. Another advantage is the lower rate of taxation. The profits from the business is treated as personal tax and so, the slabs are much lower. Lastly, it offers a high degree of flexibility and is simpler than many other forms of businesses such as corporations.

Partnership comes with its disadvantages as well. Firstly, partners have a joint and several liability which means they are liable for the actions of other partners and that of the firm as a whole (Hanson, 1998). The skills of each partner may vary and this can compromise on the success of the entire business. Besides, decision making and dealing with incompetent partners can become difficult and in many cases, it may be hard to find common values among different members.

In short, partnership comes with many advantages and disadvantages and it is up to the individual partners to decide what is best for them.

Funding options for small businesses

Entrepreneurship is the heart of American business and economy.

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Small businesses continue to play a major role in the economy today and this is why starting and funding them is easy and simplified. There are many ways to fund a small business and we will look into four broad options. The first option is to fund the business from the personal savings of the entrepreneur or by borrowing from friends and relatives. While this is a good option to start with, there is a limit on the availability of money. So, the business has to eventually look at other options for expanding and sustaining the business.

One of the popular options is to take a loan from a financial institution. The U.S. Small Business Administration also offers loans at subsidized rates to encourage small businesses. If the business is a non-profit one, then federal grants may be available as a funding option. However, the rules for getting a federal grant is stringent and may not be applicable to all businesses (sba.gov, 2012). Venture capitalists are those that fund businesses during the initial and expansion stages to get a share in the success of the company later on. This is also another viable option for entrepreneurs.

Managerial accounting and its role in product costing, incremental analysis and budgeting

Managerial accounting is an integral part of every business and it supports the planning, controlling and decision making processes of the….....

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