The advantages of the partnership pertain to the fact that partnerships are easy to establish than corporations as they have less legal documentation to process. Aside from this when there is more than one owner in the partnership, the ability to raise capital and funds are increased as opposed to a sole proprietor (Cain, 2003). The profits of the business also flow directly to the partners who have to pay tax on the income that they earn. No partnership tax is levied (Auster & Crammer, 1993).
The disadvantages of the partners however include the fact that the partners in the partnership are liable for the success as well as the failure of the business as a result in case of bankruptcy they have to provide their creditors with the amount due through their own personal finances (Daugherty, 1980). Aside from this the profits have to be shared in the partnership which can lead to disagreements in later stages of the business. Moreover the partnerships have a limited life in terms of their duration as it can end whenever one partner decides to leave, or with the demise of a partner. In terms of the legal aspect partnerships are easier to form, they have less documentation to process. The one document, the partnership agreement is the main document which forms the basis of the partnership.