A partnership firm is an organisation structure in unorganised structure. Although it holds many advantages, prominent being flexibility in operations. It is always good to refer the cons of business structure while referring its pros. I have listed the disadvantages here as requested in the question.
- A partnership business means that there is no distinction between the business and the partners.
- The liability is unlimited, and if your business fails, the partners would be personally liable for all the losses and debts.
- A more structured alternative, like a Limited Liability Partnership leads to the business being a separate legal entity, owning its owning assets, and having its own liabilities.
- A partnership is less stable structure, and it has more trouble raising money from other sources, as banks, investors, etc. Such investors tend to prefer a stable structure like company or LLP.
Furthermore, an unregistered partnership holds certain limitations compared to a registered one.
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