Explain the problems a sole trader might have if they change the legal structure to a partnership.

Mark scheme

Marking points from the official mark scheme (Feb/Mar 2022). The mark or mark type is shown in brackets.

1. [1-5] A sole trader would lose total control of the business as would have to share ownership with the other partners. This would affect the way the business operates.
2. [1-5] A Deed of Partnership should be produced. If not, there may be issues later with sharing of responsibility / workload, role allocation, division of costs and profits etc.
3. [1-5] Some partners can damage the reputation of the business by their actions.
4. [1-5] The partners may have different ideas about how to run the business.
5. [1-5] Conflict may arise between the different partners due to different objectives or idea of importance within the business.
6. [1-5] There may be problems when one partner wants to leave or dies.