A business partnership is associations between two to twenty persons called partners who are in business jointly whose aims are make investment return. Those persons can be individuals, companies or trusts. Each partner contributes capital, labour, belongings or expertise to the partnership. It is imperative that all members involved in the partnership formalize the relationship through a written agreement in order to avert future disputes. The agreement dictates the share of profits and losses. The associates are correspondingly liable for the amount overdue, on the business. Features of a partnership; it can be formed for an unknown time, every member is viewed as an agent of every other member of the partnership. Partner's private assets are attached to the business obligations, equality of shares or interest unless otherwise and ownership interest cannot be transferred without the consent of all the owners (Aronsohn, 1957 p 100).
Limited liability Company (LLC).
This is an amalgam form of business that borrows from a combination of principles from partnership and corporation. LLC can be owned and managed by one or more individuals who are referred to as the members of the LLC. LLC's do not have shareholder investors and they do not issue stocks. An LLC protects the members from private liability for the business obligations and activities of the professional handling of the business. In any case, if the LLC suffers debts or is engaged in a lawsuit the associates of an LLC are not obligated to gratify the liability or for compensations from their personal finances. Another advantage of LLC is that a multimember LLC has certain tax benefits. In the USA, the LLC is treated as a passthrough entity meaning that the income of the ...
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...y decisions in the business.
A partnership is a relationship of two partners or more who are in business with the aim of making a profit. The agreement between the two parties has to be clearly defined. The major types of partnerships discussed in this article include; limited liability company (LLC), a limited liability partnership (LLP) and a limited liability limited partnership (LLLP). A limited liability company borrows its principles from a general partnership and a corporation while in a limited liability partnership; some partners have limited liability as shareholders. In an LLLP, there are limited and general partners both of which have limited liability on debts and obligations of the partners do not trust each other. The law can be used to hold the limited partners of an LLP liable for the debts and obligations of the company.
Partnership – “A legal entity formed by two or more co-owners to operate a business for profit.” (Longenecker, Petty, Palich, Hoy, Pg. 202) In a partnership, the advantage for the owners is the capability to reduce the workload and the financial burden, especially if each partner has management skills that enhances the business. The disadvantages of a partnership such as personal conflicts and leadership expectations, therefore this organizational form should only be chosen once all other options have been considered.
LLCs must typically pay more fees to file as LLCs compared to some other business entities or sole proprietorships. Additionally, many states require yearly renewal fees. However, these fees are usually less than what some other corporations have to pay. Because of the protections afforded to LLCs, some types of businesses are ineligible to file as LLCs. Banks, insurance companies, and medical service companies are examples of businesses that can not be a LLC. Another big disadvantage is taxes. Although LLC’s allow owners to avoid federal taxes, you may actually end up paying more than it would with a different corporation, depending upon the nature of the business. Working with an accountant and/or tax lawyer is a really good idea when planning your business and forming your LLC but can also be quite expensive. The LLC business form is a relatively new concept. As a result, not a lot of cases have been decided surrounding LLCs. Case law is important because of predictability. If you know a court has ruled a certain way, you can act in a specific way to protect yourself. But if not many laws have been established yet, there is a certain vulnerability with your corporations that could expose you to greater
The limited partner only risks what they invested in the business. The downside is if the limited partner becomes active then they could potentially lose personal assets. The S corporation is a more favorable tax option on income. The disadvantage is there is certain requirement that must be met. The LLC is a great option. With this type, the risk is only what is invested unlike sole proprietorship. It is easy to set up, and has tax advantages. The downside is if a corporation wanted to switch to C, it would have to pay additional taxes. I do believe the option they picked is best for them at that time. C has tax advantages. If they started with LLC and later wanted to change, it would cost them. C is a great way to get capital as well.
...are both involved in Market Penetration. The first strategy would be to create additional market share through innovative and stylish advertising. The next market penetration strategy would be to develop new and fresh ad campaigns to compete with competitors new ads. The last strategy suggested would be of Forward Integration. This strategy would put Henri Bendel stores in more large cities. These five strategies have brought themselves to light through the TOWS Matrix.
In the case study provided, the B&L Inc. company is a manufacturer of trailers for highway transport trucks. They use three different divisions to manufacture about forty trailers per year. The current structure of the manufacturing process consists of the trailer division, a sandblast and paint division and the metal fabricating division. Brian Wilson, the materials manager, was asked by the general manager to look for opportunities that could reduce the operational costs of the organization. Pursuant to this directive, Brian decided to prioritize on reducing the cost of the metal fabricating. The one item that he has considered to outsource is the outrigger bracket. This is an accessory that is used to secure oversized containers.
S-Corporations An S-Corporation or S Corp is formed by an IRS tax election. IRS Code sections 1361 through 1379. When a S Corp is formed, it must first have a charter in the state where the headquarters of the S Corp is located. The approach that an S Corp is taxed is different from other business organizations that have been examined previously, because profits and losses can carry over to your personal tax return. This happens because the S Corp itself is not taxed, however the investors are taxed.
Limited liabilities. This means only the financial liability of each shareholder is affected so that of his or her share is only effected and only what was bought under the business is liable for debt claim.
The legal issue in the McBeth versus Carpenter case involves the question of whether James Carpenter’s purchase and selling of the Texas property, without notifying Sandra McBeth, constitutes a breach of fiduciary duties under the limited partnership contract. The rule of law in this case is the fiduciary duties of partners under the law of limited partnerships (LP). A Limited Partnership is a public and formal process that must follow statuary requirements. The formation of the LP contract must have at least one general partner and one limited partner along with a signed certificate of limited partnership (Cross & Miller, 2015). The general partner is responsible for management of the partnership and full responsibility
Companies are enterprises, also the legal person, so companies are business entity. It’s also as the business entity, different with other non-business legal person in sociality, for example: Swansea University and Morrison Hospital. Company as business entity, the distinction with non-business legal person is business is profitable legal person; A company is an artificial person. Once it is incorporated by complying with the prescribed procedure, its come into being and is a separate legal entity from its members and officers. This principle distinguishes a company from a partnership.
Another example of business ownership is a partnership. Examples of partnerships used in business are accounting firms and solicitors firms. A partnership has two or more owners. They work, manage and are responsible for the running of the business. Individual partners may concentrate on a certain aspect of the business where they have expert knowledge. As there is more than one owner, larger amounts of capital can be fed into the business via personal funding or bank loans. Partnerships have an unlimited liability.
As we know, there three popular forms of business are Partnership, S Corporation, C Corporation. The taxpayer want to start a business for 2014. Then there are some impact on Partnership, C Corporation and S Corporation.
Deciding how important decisions are made is crucial in any business structure, but even more so when there is more than one owner. Therefore, the partnership agreement mandates how the owners will make decisions by either unanimous vote or by majority vote. Capital contributions include funds provided by the partners to be utilized in the business. The partnership agreement dictates how much each partner will contribute to the business as well as plan for future financial obligations. Salaries and distributions are often classified as partner withdrawals and profit/loss allocation. The partnership agreement establishes when money is available for withdrawal and how much of the profits and losses are allocated based on capital contributions. All business entities should be prepared for worst-case scenarios involving death, disability, and dissolution. Deaths and disabilities are untimely, so the partnership agreement outlines who inherits the partnership’s assets through trusts and wills. Dissolution is never a pleasant topic to think about in the beginning, but it is essential nonetheless. The section inclusion in the partnership agreement enables the partners to be prepared in the event that a dissolution does occur (Neville
is because I take an interest in this type of business as I would like
...ad to lots of defected goods and product quality is hard to control in such circumstance.
4. Control: the members of the LLC have the ability to set up control of the corporation as they see fit.