Partnerships

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A partnership is an association of two or more persons to carry on a business for profit. When the owners of the partnership have unlimited liability they are called general partners. If partners have limited liability they are " limited partners". There may be a silent partner as well - a person who is known to the public as a member of the firm but without authority in management. The reverse of the silent partner is the secret partner - a person who takes part in management but who is not known to the public.

Any business may have the form of the partnership, for example, in such professional fields as medicine, law, accounting, insurance and stockbrokerage. Limited partnerships are a common form of ownership in real estate, oil prospecting, quarrying industries, etc.

Partnerships have more advantages than sole proprietorships if one needs a big capital or diversified management. Like sole proprietorship they are easy to form and often get tax benefits from the government.

Partnerships have certain disadvantages too. One is unlimited liability. It means that each partner is responsible for all debts and is legally responsible for the whole business. Another disadvantage is that partners may disagree with each other.

Active Vocabulary

partnership партнерство

to carry on a business вести справу

profit прибуток

general partner спільний партнер (який несе повну юридичну

відповідальність за справу)

limited partner партнер з обмеженою юридичною відповідальністю

silent partner партнер без права голосу

secret partner секретний партнер (з правом голосу, але невідомий

громадськості як партнер)

law юриспруденція

insurance страхування

stockbrokerage біржове маклерство

real estate нерухомість

oil prospecting видобуток нафти

quarrying industries видобувні промисловості

advantage перевага

disadvantage недолік

to be legally responsible бути юридично відповідальним

Comprehension Questions

1. What is the difference between a general partnership and a limited partnership?

2. Is there any difference between a silent partner and a secret partner?

What is this difference?

3. In what professional fields are the partnerships found?

4. In what businesses is the partnership a common form?

5. What are the advantages of a partnership?

6. Discuss the disadvantages of a partnership. Would you prefer partnership or sole proprietorship for business? Give your reasons.

Vocabulary Practice