You will hear five different business people talking about partnerships, one for

Questions 13—22
    You will hear five different business people talking about partnerships, one form of business.
    For each extract there are two tasks. For Task One, choose the advantage of partnerships described from the list A—H. For Task Two, choose the disadvantage of partnerships from the list A—H. You will hear the recording twice.
(10 seconds pause)
M: Starting a partnership in the United States requires little more than drawing up articles of partnership. No legal charters have to be granted, but the name of the business should be registered with state. However, unlike a proprietorship, a partnership is not easy to dismantle. Selling a partnership interest creates the same effect as the death or withdrawal of a partner. Moreover, it is difficult to place a value on a partner’s share of the partnership. No public value is placed on the partnership as there is on publicly owned corporations. When a partner insists on withdrawing, the result may be a forced sale at a price less than the value of the business.
F: Partnerships can provide diverse skills because partners are able to specialize in their areas of expertise. Two or three people can bring different but complementary skills to an association. For service-oriented partnerships in such fields as law, financial planning, and accounting, this diversity may attract customers because clients may think that the service offered by a diverse team is of higher quality than that provided by one person. While, partners must cooperate to run a business effectively. Often, disagreements over decisions, rewards, and business practices create tension between partners. These conflicts can threaten not only the profits but even the existence of the business. Unfortunately, partners sometimes dissolve their successful business because of these conflicts.
M: Partners have the advantage of combined capital resources. The partnership can draw upon the savings of all partners, and their combined personal wealth makes borrowing easier. Partnerships tend to be larger than sole proprietorships and therefore have greater earning power and better credit ratings. In general partnerships, general partners have unlimited liability for the debts incurred by the business. Should the business fail, each partner’s personal wealth maybe legally taken to fulfill the obligations of the venture. If one of the partners makes a decision that costs the company a loss, all of the partners are responsible. Such responsibility for the actions of other partners is enough to make a personthink twice before entering into a partnership agreement.
F: If a partnership wishes to keep a particular employee who contributes a valuable skill, it can make that employee a partner. Many accounting and law firms operate on this principle. When employees realize that it is possible to become part-owner of the company, they have incentive to stay with the company and perform much better on the job. However, there are many situations that can dissolve a partnership. Death, withdrawal, or bankruptcy will end the venture. Also, failure of a partner to fulfill contractual agreements can cancel the partnership. Of all the forms of business, partnerships average the shortest life span. When the partnership is terminated, the benefits of long-range planning are often lost.
M: Partnership can provide access and exposure to target markets such as leading chefs, restaurants, writers and high-income consumers and also provide access to new markets and distribution channels. Partnership apprentice admits a partner to the partnership, but makes them ineligible for profit-sharing for a fixed time. One firm fixes new partners’ salaries for the first three years and then begins profit-sharing in the fourth year. Each new partner is assigned or can purchase the same ownership percentage, which can be increased each year by some factors. It allows existing partners to see how new partners perform before they share in the profits. Animosity, however, may result as young partners work for three years without immediate rewards.
(10 seconds pause)