1.

How does a partnership firm helps to increase goodwill?

Answer»

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.



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