Partnership is considered a relatively unpopular form of business ownership due to its inherent limitations such as unlimited liability, possibility of conflicts, lack of continuity, and lack of public confidence. These drawbacks often discourage entrepreneurs from choosing this form of organisation.

However, partnership offers several merits. Firstly, there is ease of formation and closure as a partnership firm can be formed easily through an agreement between partners without compulsory registration. Secondly, it enables balanced decision making as partners can oversee different functions according to their areas of expertise, reducing errors in judgement. Thirdly, a partnership has more funds since capital is contributed by multiple partners, allowing larger operations. Additionally, there is sharing of risks among partners which reduces anxiety and burden on individuals. Lastly, partnerships maintain secrecy as they are not legally required to publish accounts or reports.

On the other hand, the limitations are significant. The unlimited liability of partners means they are liable to repay debts from personal resources if business assets are insufficient. The possibility of conflicts arises due to differences in opinions among partners. Lack of continuity occurs as partnership ends with death, retirement, insolvency or lunacy of any partner. Finally, lack of public confidence exists because financial reports are not made public, making it difficult to ascertain the true financial status of the firm.