(a) Adama and Awa have teamed up to form a partnership business. Explain five benefits they are likely to derive (b) State five provisions in the Partnershi...

Answer Details

(a) Five benefits Adama and Awa are likely to derive from a partnership

1. More capital: Two or more partners can pool larger capital than a sole trader, allowing the business to expand.
2. Sharing of risks and losses: Losses and business risks are borne by the partners jointly, reducing the burden on any one person.
3. Combined skills and ideas: The partners bring different abilities, experience and ideas, leading to better decisions.
4. Division of labour: Duties can be shared according to each partner's ability, improving efficiency.
5. Greater continuity and easier borrowing: The business can continue with the remaining partners, and lenders are more willing to grant credit to a partnership than to a sole trader.

(b) Five provisions in the Partnership Deed

1. The name of the firm and the names of the partners.
2. The amount of capital to be contributed by each partner.
3. The ratio in which profits and losses are to be shared.
4. The rights, duties and powers of each partner.
5. The rules for admitting new partners and for dissolving the partnership, and the treatment of interest on capital and drawings.