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Cards In This Set
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What is a partnership?
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A relationship that exists between two or more people who join forces to carry on a trade or business.
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What are the four main types of partnerships?
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1. Active Partners
2. Dormant Partners
3. Nominal Partners
4. Minor Partners
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What is an Active Partner?
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An Active Partner participates in the day-to-day operations of the business.
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What is a Dormant Partner?
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A Dormant Partner or "Silent Partner" Participates by contributing capital. They generally supply funds to the business and do not work with the business daily.
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What is a Nomial Partner?
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Nominal Partners only let the business use their name. They have no interest in the company. Also, they are liable to third parties.
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What is a Minor Partner?
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Minor Partners only share the profit of the business. They can be part of the business but only under certain restrictions.
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What are three things that each partner may contribute to their partnership?
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1. Money
2. Property
3. Skill
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Unlike sole proprietorships, partnerships share the ______ and _______ of the business.
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1. Profits
2. Loses
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Is it easier to start a partnership or a sole proprietorship?
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A sole proprietorship.
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One advantage to having a partnership is that there is more ______ available for funds and more ______________ skills to refer to.
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1. Capital
2. Business
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A partnership can be started without any legal formailites. Therefore it must be started using some form of agreement. What are two forms of agreement that may be used?
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1. Oral
2. Written
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In a sole proprietorship the owner makes all decisions, where as in a partnership ________ make all the decisions.
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1. All of the participating partners
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How does this benefit the business?
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The partners can contribute more ideas and debate on what they think is best for the company. New ideas provide more solutions.
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In a partnership who has the most rights?
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Every partner has equal rights.
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What should you look for in a partner? Name some characteristics.
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1. Honestly
2. Trustworthy
3. Educated
4. Amiable
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