The proprietorship form of tenure suffers from assured limitations like limited resources, limited skill, and unlimited liability. Development in business requires more capital and managerial skills and also involves more risk. A property owner finds him incapable of fulfilling these necessities.
This call for more persons comes together, with completely different edges and starts a business. Someone who lacks management skills, however, could have capital. Another one that may be a good manager although may not have capital. While these persons come together, puddle their capital and skills and organize a business, it’s referred as the partnership.
Partnership grows effectively owing to the limits or disadvantages of proprietorship.