Case Study Partnership
QUESTION 1
In term of legal form, they have a general partnership which created when two or more persons or corporations decide to associate for the purpose of carrying on business under one business name.
Liability for debts and responsibilities of the Partnership can be apportioned evenly between all partners (a 'general' partnership) or unevenly between a main partner and a number of limited or junior partners (a 'limited' partnership).
There is no requirement for a written or formal partnership agreement, but many partnerships are created under the terms of such an agreement.
QUESTIONS 2
-Simple and inexpensive to create and operate
-One big advantage of a general partnership is that you don't have to register with your state and pay a fee, as you do to establish a corporation or limited liability company. And because a general partnership is normally a "pass through" tax entity (the partners, not the partnership, are taxed unless you specifically elect to be taxed like a corporation) filing income tax returns is easy.
QUESTION 3
-A major disadvantage of a partnership is unlimited liability. General partners are liable without limit for all debts contracted and errors made by the partnership. For example, if you own only 1 percent of the partnership and the business fails, you will be called upon to pay 1 percent of the bills and the other partners will be assessed their 99 percent. However, if your partners cannot pay, you may be called upon to pay all the debts even if you must sell off all your possessions to do so. This makes partnerships too risky for most situations.
-At some time, there most certainly will be disagreements in management plans, operational procedures, and future vision for the business.
QUESTION 4
Private limited. Because shareholders are not liable for the company’s debts beyond the amount of share capital they subscribed. It is also easier to transfer ownership. Limited company are large and have a large capital. It can
In term of legal form, they have a general partnership which created when two or more persons or corporations decide to associate for the purpose of carrying on business under one business name.
Liability for debts and responsibilities of the Partnership can be apportioned evenly between all partners (a 'general' partnership) or unevenly between a main partner and a number of limited or junior partners (a 'limited' partnership).
There is no requirement for a written or formal partnership agreement, but many partnerships are created under the terms of such an agreement.
QUESTIONS 2
-Simple and inexpensive to create and operate
-One big advantage of a general partnership is that you don't have to register with your state and pay a fee, as you do to establish a corporation or limited liability company. And because a general partnership is normally a "pass through" tax entity (the partners, not the partnership, are taxed unless you specifically elect to be taxed like a corporation) filing income tax returns is easy.
QUESTION 3
-A major disadvantage of a partnership is unlimited liability. General partners are liable without limit for all debts contracted and errors made by the partnership. For example, if you own only 1 percent of the partnership and the business fails, you will be called upon to pay 1 percent of the bills and the other partners will be assessed their 99 percent. However, if your partners cannot pay, you may be called upon to pay all the debts even if you must sell off all your possessions to do so. This makes partnerships too risky for most situations.
-At some time, there most certainly will be disagreements in management plans, operational procedures, and future vision for the business.
QUESTION 4
Private limited. Because shareholders are not liable for the company’s debts beyond the amount of share capital they subscribed. It is also easier to transfer ownership. Limited company are large and have a large capital. It can