A Partnership (Leaving Cert Business): Revision Notes

A Partnership

Running a Partnership

Partnerships are common among solicitors and accountants.

• Formation: Register the partnership with the Companies Registration Office (CRO) by completing Form LP1. A signed deed of partnership, outlining the rights and obligations of each partner, including profit sharing, is required.
• Liability: Partners have unlimited liability, meaning personal assets can be used to cover business debts if necessary.

• Control: Control is shared among the partners according to the deed of partnership.
• Finance: Funding comes from partner contributions, business profits, and possibly loans secured by the partnership.

Advantages of running a Partnership

Running a partnership is appealing to many Business owners for reasons such as:

• Shared Responsibility: Workload and decision-making are shared among partners, reducing individual stress.
• Confidential Accounts: Partnerships can keep their accounts confidential and are subject to fewer regulations compared to corporations.

• Easier Financing: Banks and investors may be more willing to lend money to partnerships due to shared liability and combined assets.

Disadvantages of running a Partnership

Running a partnership has drawbacks such as:

• Unlimited Liability: Partners are personally responsible for all business debts and obligations, risking personal assets to settle liabilities.
• Dissolution on Death: If a partner dies, the partnership is dissolved, and a new partnership must be formed.

• Profit Sharing: Profits must be shared among partners, which can reduce individual earnings compared to a sole trader.