Entrepreneurship Development

ENTREPRENEURSHIP DEVELOPMENT FOR RURAL FAMILIES 4(1+3)

Lesson 7 : Types of Enterprises

Partnership enterprise

Partnership enterprise has been adopted to arrange more capital, better skills, control and management etc. In India they are governed by the Indian partnership act, 1932.

Partnership is the relation between persons who have agreed to share profits of an enterprise carried on by all. It is agreement between partners to carry on specific business, to share profits and to manage an enterprise.

Features:

• It is result of contractual relationship between two or more partners.
• Partners start an industry to earn and share profit of an enterprise carried by them.
• For trading related business number of partners should be minimum two and maximum 20.
• Liabilities of all owners of a partnership firm are unlimited.
• There is very easy procedural formality to form a partnership firm.
• By permission of all partners, the share of any partner can be turnover.
• It is highly flexible as well as mobile
• Risk of an enterprise is divided among partners.

Advantages:

• Very easy formation
• Flexible and mobile
• More pooling of financial and other resources as well as skills.
• Division of risk among partners.
• Strong credit position, in comparison to sole proprietorship.

Disadvantages:

• Resources limited to the capacity of partners.
• unlimited liability of partners
• Difficult to maintain harmony of interest among the partners.
• Limited stability.