partnership

Examples of partnership in the following topics:

• Pros and Cons of a Partnership

  • The partnership structure has the benefit of simplicity and control but the drawback of personal liability for the partnership's activities.
  • The partnership is one type of business structure.
  • This means that the partnership structure is only as good as the partnership at the relational level.
  • If the mutual consent to form a partnership breaks down, the partnership breaks down as well; partnerships are considered to be an aggregate of their partners rather than a separate entity.
  • Types of partnership beyond the general partnership have developed to mitigate some of the disadvantages of the structure.

• Forms of Business Organizations

  • A partnership is a business owned and managed by two or more people.
  • Partnership is defined as general or limited liability.
  • Under a general partnership, all partners become liable for the partnership's debts and obligations.
  • On the other hand, general partnerships do not have this protection.
  • Usual partnerships are accounting and law firms.

• Corporate Taxes

  • A partnership is a business entity with two or more owners.
  • For tax purposes, partnerships are treated similarly to a sole proprietorship - the owners pay tax on their "distributive share" of the business's taxable income.
  • Although vastly outnumbered by sole proprietorships and partnerships, most of the largest companies in the U.S. are C corporations.
  • Shareholders generally cannot include corporations or partnerships (certain trusts, estates and tax-exempt corporations are permitted).
  • An LLC, like an S corporation, is a hybrid entity having certain characteristics of both a corporation and a partnership or sole proprietorship.

• Pros and Cons of a Corporation

  • Compared to other business structures, such as sole proprietorships and partnerships, the corporation is less simple to found and maintain, one of its disadvantages.
  • S status combines the legal environment of standard corporations with U.S. federal income taxation similar to that of partnerships.
  • As with partnerships, the income, deductions, and tax credits of an S corporation flow through to shareholders annually, regardless of whether distributions are made.

• The Statement of Equity

  • The statement of equity (and similarly the equity statement, statement of owner's equity for a single proprietorship, statement of partner's equity for a partnership, and statement of retained earnings and stockholders' equity for a corporation) are basic financial statements.

• Pros and Cons of Sole Proprietorship

  • With sole proprietorships, like some forms of partnership, owners can be personally liable for business losses, meaning their personal assets are not protected against the claims of creditors.

• Overview of Organizational Structure

  • There are various forms of organizational structures from a business perspective, including sole proprietorships, cooperatives, partnerships, limited liability companies, and corporations.
  • With sole proprietorships and some forms of partnership, owners can be personally liable for business losses, meaning their personal assets are not protected against the claims of creditors.

• Formation of the Corporation

  • Some jurisdictions do not allow the use of the word "company" alone to denote corporate status, as it may refer to a partnership or some other form of collective ownership (in the United States it can be used by a sole proprietorship but this is not generally the case elsewhere).
  • The legal ending indicates that it is, in fact, a legal corporation and not just a business registration or partnership.

• Limitations of the Balance Sheet

  • In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, business partnership, corporation, or other business organization, such as an LLC or an LLP.

• Answers to Chapter 3 Questions

  • Partnerships could raise some capital because two or more partners pool their funds together.