In general, a partnership is described as a legal relationship that exists between two or more people who carry on a joint business with the goal of benefit. (a) Describe the different types of partners and their characteristics. (attached point form answer for this question; kindly assist me to elaborate more on each points) (b) Determine the conditions that must be met for a partnership to exist.(attached point form answer for this question; kindly assist me to elaborate more on each points)
In general, a partnership is described as a legal relationship that exists between two or more people who carry on a joint business with the goal of benefit. (a) Describe the different types of partners and their characteristics. (attached point form answer for this question; kindly assist me to elaborate more on each points) (b) Determine the conditions that must be met for a partnership to exist.(attached point form answer for this question; kindly assist me to elaborate more on each points)
Chapter10: Partnership Taxation
Section: Chapter Questions
Problem 23MCQ
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In general, a partnership is described as a legal relationship that exists between two or more people who carry on a joint business with the goal of benefit.
(a) Describe the different types of partners and their characteristics. (attached point form answer for this question; kindly assist me to elaborate more on each points)
(b) Determine the conditions that must be met for a partnership to exist.(attached point form answer for this question; kindly assist me to elaborate more on each points)
![Types of partners
Characteristics
Full
Contribute capital to the partnership
• Are actively engaged in the partnership
business
• Share the profits and losses of the
partnership
• Income from the partnership is taxed
under section 4(a) Business Income
• Do not contribute capital to the
partnership
• Draw a salary from the partnership
Salaried
business
• May or may not received a share of the
profits
• Do not share any partnership losses
Income from the partnership is taxed
under section 4(b) Employment
Income.
Sleeping
Contribute capital to the partnership
Do not participate in the activities of
the partnership business.
• Receive a share of the profits
• Income from the partnership is taxed
under section 4(a) Business Income.
• Subscribe to a fixed amount of capital
for the partnership
• Are not actively engaged in the
Limited
management of the business
Income from the partnership is taxed
under section 4(a) Business Income
• A company may become a partner of a
partnership business
Income from the partnership is taxed
under section 4(a) Business Income
Corporate](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1f18ff3d-8db3-4c07-b36d-065e1ebf8417%2F150e3690-4064-41dc-a692-16c417c66430%2F79lkipj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Types of partners
Characteristics
Full
Contribute capital to the partnership
• Are actively engaged in the partnership
business
• Share the profits and losses of the
partnership
• Income from the partnership is taxed
under section 4(a) Business Income
• Do not contribute capital to the
partnership
• Draw a salary from the partnership
Salaried
business
• May or may not received a share of the
profits
• Do not share any partnership losses
Income from the partnership is taxed
under section 4(b) Employment
Income.
Sleeping
Contribute capital to the partnership
Do not participate in the activities of
the partnership business.
• Receive a share of the profits
• Income from the partnership is taxed
under section 4(a) Business Income.
• Subscribe to a fixed amount of capital
for the partnership
• Are not actively engaged in the
Limited
management of the business
Income from the partnership is taxed
under section 4(a) Business Income
• A company may become a partner of a
partnership business
Income from the partnership is taxed
under section 4(a) Business Income
Corporate
![For a partnership to exist, at least one of the main criteria below must be satisfied. These
are:
• Formal agreement between the parties
• The partnership is registered with the Registrar of Businesses/Corporations
• The partnership is registered with an appropriate professional body
• The partnership maintains its own bank account and the partners are cheque
signatories
• The partnership names are shown on the organisation's business stationery, its trade
premises and in trade directories
• There is agreement on the basis of sharing the profits and losses of the partnership
There is agreement on the basis of contributing capital to the partnership](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1f18ff3d-8db3-4c07-b36d-065e1ebf8417%2F150e3690-4064-41dc-a692-16c417c66430%2Fle4e6uf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:For a partnership to exist, at least one of the main criteria below must be satisfied. These
are:
• Formal agreement between the parties
• The partnership is registered with the Registrar of Businesses/Corporations
• The partnership is registered with an appropriate professional body
• The partnership maintains its own bank account and the partners are cheque
signatories
• The partnership names are shown on the organisation's business stationery, its trade
premises and in trade directories
• There is agreement on the basis of sharing the profits and losses of the partnership
There is agreement on the basis of contributing capital to the partnership
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