There is nothing wrong in or disadvantage in a partnership. Any business entity would have both merits and demerits in it. As such for a partnership firm, there are more than two persons in the business; unity among them becomes utmost essential. If unity is not secured, disputes arise and disturb the smooth working of the business. Secondly, as there is limitation on the total number of partners, the capital that can be raised becomes limited. Thirdly, there is no Governmental supervision over the affairs of the business of a partnership and publishing accounts is also not necessary. Hence, public may not have full confidence in them. Fourthly, the liability of the partners is unlimited, jointly and severally. This discourages many people from becoming the partners of the firm. A partner cannot transfer his interest to a third party without consent of other partners. This blocks the money invested by a person and it may discourage many investors from becoming partners of the firm. Utmost good faith is the essence of partnership. If a partner acts dishonestly, it may land all others in trouble, because he is an agent of the firm. Partnership lacks continuity of existence, as the death, insolvency or insanity of a partner leads to its dissolution. The radical changes in the methods of production and distribution in modern business leads to large scale business operations. This may not be adapted by partnership due to limited capital and managerial resources.