Self-Study Session: Partnership

Partnership Articles of Co-Partnership Forms of Business Organization Based on Operations Based on Liabilities
Business owned by two or Agreement in writing Sole Proprietorship Service Concern General
more individuals among the partners Owned and managed by Merchandising Limited
Does not involve special Name of partnership only one person
Manufacturing concern
legal requirements It has some significance, and connotation Partnership

Statement of Names and address of partners Two or more persons who bind
Financial Position Classes of partners themselves together to do
business for profit
Contained the listing of the business's General partner
Corporation
asset, liabilities and equity
Limited partner
To convert single Authorized by law to act as a single person
Effective data of the contract
proprietor to partnership but is comprised of one or more person
Purpose and principal place of
Revalue the assets and liabilities based on business of the partnership People who put in capital in a corporation
Fair Market Value to obtain fair valuation are called stockholders
Investments each partner will make in the business
of capital of Charito stating the contributions of each partners
Liability
Close the books of accounts in order to transfer Whether you are capitalist,
all these accounts to the partnership To the extent of
property or industry
investment, does not go
Record the investment of Rights and Duties of each partners to personal property
both owners in the new Indicate duties and
set of books Extent of government
responsibilities control is very strict
Supported by a legal agreement Allocation and distribution of profits Cooperative
(losses) among the partners
Articles of co-partnership For socio-economic
Conditions under which the partners may
Agreement among the partners withdraw money and other assets needs and aspiration
governing the nature and Manner of keeping the books of accounts
Owned and democratically
terms of partnership Method of decision making such as controlled by all members
the causes for dissolution
Characteristic of Partnership
Based on contract
Voluntary association
Mutual agency
One owner could
represent the other
Limited life
Partnership may dissolve any time by
action of the partners
Unlimited liability
Liquidating assets when unable
to settles the liability posed
by the creditors
Co-ownership of property
Co-ownership of profit
Legal entity
Income tax
Pros and Cons
Easy and inexpensive to
form and to dissolve
Greater amount of capital
may be raised compare to
sole proprietorship
Relative freedom and
flexibility in decision
making
Better managed because more
than one person supervises
business affairs
Unlimited liability makes it
less risky for creditors
Lack of business continuity Bec it
can be easily dissolved
Limited amount of capital
may be raised compared to
a corporation
Unlimited liability of a
partnership may stop people
from forming one
General partner may be
subjected to a personal
liability for bad management
Likelihood of dissension and
disagreement when each of the
partners has the same authority