WAEC Economics 2010 Theory — Question 13

Model answer

Advantages: (i) Ability to raise more capital because of pooling of resources together (this makes it possible for the business to have a stronger financial base than the sole proprietor). (ii) Greater efficiency because of different skills and expertise in the business. (iii) Continuity is more guaranteed than in sole proprietorship. Disadvantages: (i) Unlimited liability of the partners. (ii) Disagreement and friction among the partners which slow down decision making. (iii) Limited capital base.