Forms Of Business And Partnership Flashcards
Some proprietorship
One person in business
Sole proprietorship advantages
Advantages:
- easy “just do it” need to look at zoning, bylaws, tax implications
- Your the boss - get all the profit and glory
- Business deductions - all costs deduct from income
Sole proprietorship disadvantages
- Workload
- Tax rate
- liability - your business and personal assets are at risk if the business fails
Partnership
Means the relationship that subsist between persons carrying on a business in common
Partner agent
Each partner is an agent of the firm and of the partners other partners for the purpose of the business of the partnership
Power of partner to bind the firm
Each partner can bind each other
Advantages of partnership
More help, more ideas, more $$$
Disadvantages of partnership
Joint and several liability
If you use firm assets and clients for yourself
All the profits that you make belongs to the firm **
Determining a partner: on winding a partnership up how is property divided?
Any $ in a partners account already earned is theirs + they share profits income + expenses equally
** accountability of partners for private profits
Each partner shall account to the firm for a benefit derived by the partner without the consent of the other parties from
A) any transaction concerning the partnership
B) any use by the partner of the partnership, property, name or business connection
Variation by consent of terms of partnership
The mutual rights and duties of partners whether ascertained by agreement or defined by this act may be varied by the consent of the partners
Limited partnership: application of part
This act shall, in the case of limited partnerships, be read subject to this part
- one or more persons who are general partners
- Limited partnership
