1. Unlimited Liability

• Partners are personally liable for the debts of the firm
  
• Personal assets can be used to repay business obligations
  
• All partners are jointly and individually responsible for liabilities
  
• Losses are not limited to capital contributions
  
• Financial risk increases with larger debts or disputes
  

2. Risk of Disputes

• Differences in opinion can lead to internal conflicts
  
• Disagreements over profit sharing, duties, or policies may arise
  
• Unequal efforts or contributions can cause resentment
  
• Lack of clear communication may affect business decisions
  
• Frequent disputes may harm the firm’s reputation and stability
  

3. Limited Capital and Growth Potential

• Capital is restricted to the contributions of partners
  
• It may be difficult to raise large amounts of funding
  
• Partnerships lack access to equity markets like companies
  
• Expansion may be limited due to financial constraints
  
• Dependence on partner savings limits long-term growth
  

4. Lack of Continuity

• The firm may dissolve on the death or retirement of a partner
  
• Partnership has no perpetual succession like a company
  
• Frequent changes in the firm’s structure may disrupt operations
  
• Business continuity depends on the willingness of remaining partners
  
• Sudden exits can lead to instability or loss of clients
  

5. Difficulty in Transferring Ownership

• A partner cannot transfer their share without the others’ consent
  
• Bringing in new partners requires unanimous agreement
  
• Exit processes may be complex and time-consuming
  
• Lack of liquidity for partner interests in the firm
  

Inflexibility can discourage potential investors or successors