Two heads are better than one is what we say. So partnership possesses some advantages over sole proprietorship. There is a characteristic internal control (checks and balances) in its structure and this, though creates a lull, makes for more quality decisions and better business. Moreover, it also have more flexibility than larger corporations. Partnership makes available capacity to achieve what may not be achieved otherwise. Therefore, below are three reasons to start a partnership and remain in one.

Easy to establish
With partners possessing complementary strengths, setting up a partnership becomes easier. The business enjoys the resources of the partners; the capital, the network, their influence and their knowledge. In comparison with corporations, partnerships have lower startup cost, while also possessing the flexibility for conversion into corporations or sole-proprietorships.

Greater borrowing capacity
There is always a need to borrow in business. This could come with the need to raise initial capital or more capital for expansion. Capacity answers the question on the ability of an entity or individual to repay loan granted, and this is one of the Five Cs of Credit. This capacity is enhanced when people come together in partnership. The business can borrow on the strength of the joint capacity of the partners.

Tax Saving
In most countries, partnerships bear a lesser burden of tax than big corporations. They are free from double taxation. Only the income shared to partners and paid to staff are taxed, not the profit of the business. In contrasts, the income and dividends paid to staff and shareholders of large corporations are taxed, while a large proportion of the profit of the corporation is also being paid as tax.

What are your thoughts about starting a partnership Share them with us on Twitter @excellaid