(a) Adama and Awa have teamed up to form a partnership business. Explain five benefits they are likely to derive
(b) State five provisions in the Partnership Deed.
Explanation
(a)Adama and Awa will enjoy the following benefits in their partnership business:
(i) Division of labour leading to specialisation/skills and efficiency
(ii) In case of loss both would share, thus making the burden light on both of them.
(iii) The business can continue even if one of them is not around. (Not in case of death. In death the partnership stops.)
(iv) Both partners will share ideas leading to very good decisions to the advantage of the business.
(v) In partnership there is the possibility of more capital as both will contribute to the capital.
(vii) Possibility of employing competent hands.
(viii) They will enjoy privacy in their business.
(b) The provision, in the Partnership Deeds are as follows:
(i) Sharing of profit and loss
(ii) Management of their business
(iii) Duration of the business
(iv) Drawing rights.
(v) Capital contribution
(vi) Interest payable on loans from members
(vii) Procedure in the event of death of a member
(viii)Admission of new partners.
(ix) Renumerations salaries
(x) The names of the partners.
(xi) The nature of the business.
(xii) The name of the firm.