Advantages of a partnership firm:
1. Easy and less expensive process of establishment:

• The process of establishing a partnership firm is quite easy and cheap. One also need not pass through lengthy and complex legal procedures.
• In fact as per the Partnership Act, one can even run a partnership without registering it however it is always advisable to register.

2. Efficient management:
Unlike proprietorship, there are more than one owners of the partnership firm. Due to this there exists sharing of intelligence, knowledge, skills and experience among partners. The partners take personal interest and care in managing and controlling the business and so the efficiency of partnership firm is higher.

3. Increase in goodwill/credit worthiness:
In partnership firm, all the partners have unlimited liability to pay-off business debts. This creates a positive impact on creditors or vendor’s mind. They do not ‘ hesitate to sell goods on credit or lend money knowing that if one of the partner fails to pay back the other will have to pay anyhow. This increases the goodwill or credit of the firm compared to sole proprietorship.

4. More capital:
A partnership consists of more than one owner and so more capital can be raised collectively. Moreover, when the business expands and one needs more capital than it can be done by adding a new partner.

5. Advantage of division of labour:
Partners can divide the works among themselves based on their skills and experience and obtain the benefit of division of labour.

6. Systematic decisions:
At the time of taking an important decision the partners gather and discuss it thoroughly. They share their experience, knowledge and opinions with respect to the decision. When everyone agrees and come to a common conclusion a decision is made. Thus, in partnership firms there are quite less chances of wrong decisions.

7. Flexibility:
A partnership firm is formed by the voluntary agreement of each partner. So, it is easy to make changes in the business as per the situation. For example, as per the changing market environment the partners can change their products or processes after thoughtful discussions among themselves.

8. Protection to the interests of minority:
Generally in a partnership firm all the works are done with mutual consent of all the partners. So, even if one partner disagrees the firm may not be able to execute a desired work or a decision. Moreover, a partner who does not wish to continue with the firm can ask for dissolving the partnership.
In these senses we can say that in a partnership firm the interests of minority also get protection and are taken care of.

9. Direct relations with customers:
Just like sole proprietorship, the partners of the partnership firm remains in contact with their customers, employees, vendors, etc. Hence, they can take good care of their needs and expectations.

10. Decentralization of economic power:
In a partnership firm the power to control the funds of the company lies with all the partners. This helps to mobilize the funds better and to stop a partner from making wrong monetary decision. This safeguards the firm against financial crises.

11. Less burden of income tax:
The profit of the firm gets divided among the partners as decided in the deed. So, the income tax liability also gets divided among partners and they are less burdened.