| Term | Definition |
|---|
| Partnerships are governed by the Partnership Act of 1908. | Governed |
| A partnership must have at least two members. | Members |
| Most partnerships have a Partnership Agreement which lays down the rules for operating the business and sharing the profits. The rules are decided by the partners themselves. | Rules |
| If there is no Partnership Agreement, then the business is covered by the rules laid down in the partnership act. | If there are no rules |
| Partners can share skills and expertise. | A - Share S&E |
| Partners can share risk and responsibility of the business. Partners can take holidays or sick leave more easily. | A - Share R&E |
| Partners can combine resources making expansion of the business easier. | A - Expansion |
| A silent partner is someone who invests in the business but they don't take any part in running the business. | A - Silent Partner |
| The partnerships is not a seperate legal entity from the partners themselves. | D - Legal entity |
| Partners may be liable for the debts of the business. Personal assets may be sold to pay these debts. | D - Debts |
| If one partner goes bankrupt, the personal assets of the other can be sold to pay his or her share of the business debts. | D - Bankrupt |
| Profits must be shared among the partners. This is a trade-off for sharing the risks of the business. | D - Profits |
| Expansion of the business is still limited by the amount of finance the partners can raise themselves, in the form of personal resources or through borrowing. | D - Expansion |
| If a partnership dies or retires, the partnership is at an end | D - Life |
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