How Do You Understand The Disadvantages Of A General Partnership?
A general partnership is a business entity formed by two or more persons who share responsibility for the debts and conduct of a business. Ease of setup and fewer tax complications are some of the more attractive components of this relatively simple business format. Nevertheless, you should understand all the disadvantages before using this business format. The following steps will help you understand the potential risks of a general partnership. Risk personal liability for all legal actions and debts of any general partnership to which you belong, and throw yourself on the mercy of your partners. Live with the potential for being “squeezed out” by your partners in a general partnership due to equal voting rights, regardless of financial or real input to the entity. Know that fiduciary duty is implied by any general partnership unless explicitly renounced in the partnership agreement. You are responsible to your partners for subordinating your interest to those of your partners. Pay mo
