Partnership

A partnership is a business structure made up of two or more people who distribute income or losses
between themselves. It is an association of two or more people to carry on, as co-owners, a business for
profit. Owners contribute property, money or services to the business for their common benefit.
Partners share profits from the business in prearranged proportions.

There are 3 main types of partnerships:

 General partnership 

A general partnership is a business arrangement by which two or more individuals agree to share in
all assets, profits, and financial and legal liabilities of a jointly-owned business. In a general
partnership, partners agree to unlimited liability, meaning liabilities are not capped and can be paid
through the seizure of an owner's assets. Furthermore, any partner may be sued for the business's
debts.

 Limited partnership

Limited partnership is a partnership made up of two or more partners. The general

partner oversees and runs the business while limited partners do not partake in managing the
business. However, the general partner of a limited partnership has unlimited liability for the debt,
and any limited partners have limited liability up to the amount of their investment.

 Limited liability Partnership

Limited liability Partnership is where partners can have limited liability for the debts of the
business. However, under limited liability partnership there must be at least one general partner
with unlimited liability. If the business cannot meet its obligations, the general partner (or
partners) become personally liable for the shortfall.

Incorporation
Corporations are formed by following a formal process of incorporation set forth by state statutes. A
corporation can be viewed as an artificial individual created to conduct business by acquiring assets,
hiring employees, paying taxes and facing pertinent legal issues including litigation. A corporation may
also own property, enter into contracts and borrow money.

 unlimited liability company

An unlimited liability company is a corporate structure that allows shareholders to be liable if the
company declares bankruptcy. Sometimes ex-shareholders are also liable, depending on how
recently they sold their stock. Despite this disadvantage, the structure of a unlimited liability
company can be preferable in certain circumstances due to the tax benefits granted to
shareholders of these companies.
  Private limited liability company

A private limited liability company (PLLC) is a business entity designed for licensed privates, such as
lawyers, doctors, architects, engineers, accountants, and chiropractors. While many businesses
choose to form a limited liability company ("LLC") because of the tax, limited liability, and other
benefits, some states don't allow LLCs to be owned by professionals whose occupation requires a
license. In these states, licensed professionals who want the benefits of an LLC must form a PLLC
instead.

 Public company

A public company is a corporation whose shareholders have a claim to part of the company's assets
and profits. Through the free trade of shares of stock-on-stock exchanges or over-the-counter
markets, ownership of a public company is distributed among general public shareholders.

Personal choice
As an architecture student and future architect, I would like to choose the partnership business
structure initially. The reasons for choosing the structure are; firstly, partnership enables owners to
utilize the resources and skills of the other partners which is an important brace for business beginner.
Secondly, partnership has simple operating structure which is fairly simple to establish and run. The
other reason is the initial cost to start the business. Since the start-up cost for partnership structure is
low, I will prefer to start my business by partnership business structure. Generally, I prefer partnership
because of the following advantages:

 two heads (or more) are better than one

 my business is easy to establish and start-up costs are low
 more capital is available for the business
 I’ll have greater borrowing capacity
 high-caliber employees can be made partners
 there is opportunity for income splitting, an advantage of particular importance due to resultant
tax savings
 partners’ business affairs are private
 there is limited external regulation
 it’s easy to change your legal structure later if circumstances change.
Professional practice and
ethics

Rediet Bogale
UGR/2178/12
Dec. 23,2022