Question

“Partnership overcome the shortcomings of sole proprietorship”. Justify this statement in favour and give a reason.

Answer 1

Partnership overcomes the shortcomings of sole proprietorship in several ways.

1. First, it allows pooling of larger financial resources as multiple partners contribute capital, which overcomes limited funds in sole proprietorships.
2. Second, the combined skills and experience of partners improve business decisions, addressing the limitation of a lack of specialization.
3. Third, partnership provides shared responsibility and mutual supervision, reducing individual workload and risk.
4. These factors make partnerships more efficient and capable of expansion than sole proprietorships.