There are a number of different ways, each under a specific set of circumstances, that a new business can be established. These types of business classifications include sole proprietorship, corporations, limited liability corporations and finally, partnerships. A partnership is when two or more parties combine to form a business. There are some strong points about forming this type of .
business. However, there are also a number of disadvantages that come along with forming a partnership.
The major disadvantage of a partnership is that the company is responsible for unlimited liability, unlike a limited liability corporation. Partners risk having their personal property taken for business liabilities. Also with a partnership, the company's resources are only as deep as what the partners have to contribute. Other disadvantages of partnerships include instability, the potential for mutual distrust and the possible lack of public faith.
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