Success and/or failure factors of a partnership
Partners are actively involved in management and may use the ideas of other partners.
Partners have access to expertise of other partners when difficult decisions have to be made.
Not all partners need to be actively involved in manage ment and would rather appoint competent managers
Decision making can be time consuming as all partners have to be in agreement.
Some management tasks may be neglected, as one partner may leave it to others to complete.
Partners may disagree on how to run the business, which may lead to tension between them.
Partners are agents of the partnership and bad management decisions may be forced onto other partners.
Different personalities/opinions could lead to conflict/ disagreements.
Partnerships only pay VAT on relevant products sold/services rendered which reduces tax administration.The partnership does not pay income tax, only the partners in their personal capacities.
High earning partners pay more tax, which may discourage other partners from joining the partnership.Partners may withdraw more cash to reduce their tax burden which may cause cash flow problems for the partnership.