DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : R.Dasharatham
Designation : Lecturer
Branch : D.C.C.P.
Institute : GPW, Warangal
Year : I year
Subject : Business Organization
Subject code : CCP-104
Topic : Forms of Business Organization-Sole
Trading and Partnership
Duration : 50 mts
Sub topic : Merits of partnership
Teaching Aids: :P.P.T., Animation, Photos

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Objectives

On completion of this lesson, you would be

able to know:
 Merits of the Partnership

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Merits of Partnership firm
 Easy formation: It is easy to start a business
under partnership.

 Division of Labour : As firm consists of no. of

partners, the work will be distributed among all
the individuals.

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Merits of Partnership firm
3. Huge Capital: Unlike the sole trading, the capital
contributed by all the partners will become a bulk
or huge amount.

4. Quick decision: The decisions regarding the

firm/business can be taken quickly without any loss
of time.

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Merits of Partnership firm

5. Flexibility: The partners can change the nature or

situation of the business very easily just with a new
agreement.

6. Borrowing capacity: The firm can raise more loans

beyond its business assets, as the raising of loans
depends on personal properties of all the partners.

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Merits of Partnership firm

7. Secrecy of Business: The affairs and accounts of

the firm do not require publicity by law. Hence
they can be kept secret.

8) Incentive to work hard: The liability of the partner

in a firm is unlimited i.e. joint and several. So each

and every partner works hard for success of the
business.
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Merits of Partnership firm

9) Personal Supervision: Wastage can be

eliminated and expenditure can be minimized,
since the partners can supervise the business
works personally.
10) Better Credit Worthiness: Since the creditors of

the firm can recover their loans from the private

properties of the partners, the borrowing

capacity of the firm is not limited.
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Merits of Partnership firm

11) Protection of Minority Interest: Every partners

has a right to express his opinion on all business
matters. Otherwise, if any partner is not satisfied
with any decision, he can leave the firm.

12) Personal contacts with Customers:Since all the

partners can take part in the business, they are able
to know about the needs of the customers, their
likes and dislikes.

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Summary

At the end of this period, you will be able to

know:

 Merits of the Partnership

CCP104.16 9
Quiz

3. Which of the following is the Merit of the

Partnership firm:

a) Easy formation.
b) Incentive to work hard
c) Better credit worthiness
d) All the above

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Frequently asked questions

2. List out the various merits of the Partnership firm.

2. What is meant by Better credit worthiness?

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