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  • Essay / Disadvantages of Limited Partnership - 788

    This form would require the family to determine how everyone will be involved in the business and how the formulation of the business will proceed. An advantage of this form is that limited partners can invest in the business without incurring any liability other than the investment. It also allows limited partners to share profits, meaning other family members would be allowed to invest in the family business. This model works well if the business owner is Xavier and the limited partners are Alex, Bill, Carl and Devon. This means that the brothers would divest the business, but the value of the business would be considered the assets of the business. The disadvantage of this business is that the brothers, as the limited partners have no other rights or management rights in the business. Another disadvantage is the requirement to complete the appropriate paperwork correctly, otherwise the business reverts to a partnership and therefore exposes all parties to unlimited liability. The downsides are a major point of discussion, especially from a Christian world view, and could hinder this positive option for establishing this system.