Partnerships - GCSE Business Definition

Partnerships are a type of business structure where two or more individuals (partners) own and run a business while sharing profits, losses, and responsibilities. Each partner contributes to the business, through finance, skills, or labour, and shares in the decision-making process. Unlike sole traders, partnerships pool resources and expertise, leading to increased business opportunities and reduced workload per individual. However, partners also share unlimited liability, where they are collectively responsible for any debts incurred by the business, potentially risking their personal assets. Partnerships often operate under a partnership agreement, which outlines the rights and responsibilities of each partner to avoid potential conflicts.