Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 14, Problem 1Q

To determine

Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Expert Solution & Answer

Explanation of Solution

The advantages of operating a business as a partnership rather than as a corporation are:

The ability to make virtually arrangements defining their relationship to each other that the partners desire.
Less hassle of forming a partnership.
Fixed oral agreement is required to form a partnership.
Operating costs are reduced and partners can make decisions which they desire.
Partnership can claim losses as tax and do not pay taxes.

The disadvantages of operating a business as a partnership rather than as a corporation are:

Partners have unlimited liability.
Every partner is liable to pay the debts incurred.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

I am looking for the correct answer to this financial accounting question with appropriate explanations.

I am searching for the correct answer to this general accounting problem with proper accounting rules.

General accounting

Answer 2

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 14, Problem 1Q

To determine

Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Expert Solution & Answer

Explanation of Solution

The advantages of operating a business as a partnership rather than as a corporation are:

The ability to make virtually arrangements defining their relationship to each other that the partners desire.
Less hassle of forming a partnership.
Fixed oral agreement is required to form a partnership.
Operating costs are reduced and partners can make decisions which they desire.
Partnership can claim losses as tax and do not pay taxes.

The disadvantages of operating a business as a partnership rather than as a corporation are:

Partners have unlimited liability.
Every partner is liable to pay the debts incurred.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 14, Problem 1Q

To determine

Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Expert Solution & Answer

Explanation of Solution

The advantages of operating a business as a partnership rather than as a corporation are:

The ability to make virtually arrangements defining their relationship to each other that the partners desire.
Less hassle of forming a partnership.
Fixed oral agreement is required to form a partnership.
Operating costs are reduced and partners can make decisions which they desire.
Partnership can claim losses as tax and do not pay taxes.

The disadvantages of operating a business as a partnership rather than as a corporation are:

Partners have unlimited liability.
Every partner is liable to pay the debts incurred.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 14, Problem 1Q

To determine

Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Expert Solution & Answer

Explanation of Solution

The advantages of operating a business as a partnership rather than as a corporation are:

The ability to make virtually arrangements defining their relationship to each other that the partners desire.
Less hassle of forming a partnership.
Fixed oral agreement is required to form a partnership.
Operating costs are reduced and partners can make decisions which they desire.
Partnership can claim losses as tax and do not pay taxes.

The disadvantages of operating a business as a partnership rather than as a corporation are:

Partners have unlimited liability.
Every partner is liable to pay the debts incurred.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 14, Problem 1Q

To determine

Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Expert Solution & Answer

Explanation of Solution

The advantages of operating a business as a partnership rather than as a corporation are:

The ability to make virtually arrangements defining their relationship to each other that the partners desire.
Less hassle of forming a partnership.
Fixed oral agreement is required to form a partnership.
Operating costs are reduced and partners can make decisions which they desire.
Partnership can claim losses as tax and do not pay taxes.

The disadvantages of operating a business as a partnership rather than as a corporation are:

Partners have unlimited liability.
Every partner is liable to pay the debts incurred.

Answer 6

Chapter 14, Problem 1Q

To determine

Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Expert Solution & Answer

Explanation of Solution

The advantages of operating a business as a partnership rather than as a corporation are:

The ability to make virtually arrangements defining their relationship to each other that the partners desire.
Less hassle of forming a partnership.
Fixed oral agreement is required to form a partnership.
Operating costs are reduced and partners can make decisions which they desire.
Partnership can claim losses as tax and do not pay taxes.

The disadvantages of operating a business as a partnership rather than as a corporation are:

Partners have unlimited liability.
Every partner is liable to pay the debts incurred.

Answer 7

Chapter 14, Problem 1Q

To determine

Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Answer 8

Expert Solution & Answer

Explanation of Solution

The advantages of operating a business as a partnership rather than as a corporation are:

The ability to make virtually arrangements defining their relationship to each other that the partners desire.
Less hassle of forming a partnership.
Fixed oral agreement is required to form a partnership.
Operating costs are reduced and partners can make decisions which they desire.
Partnership can claim losses as tax and do not pay taxes.

The disadvantages of operating a business as a partnership rather than as a corporation are:

Partners have unlimited liability.
Every partner is liable to pay the debts incurred.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 14 - Prob. 1Q Ch. 14 - Prob. 2Q Ch. 14 - Prob. 3Q Ch. 14 - Prob. 4Q Ch. 14 - Prob. 5Q Ch. 14 - Prob. 6Q Ch. 14 - Prob. 7Q Ch. 14 - Prob. 8Q Ch. 14 - Prob. 9Q Ch. 14 - Prob. 10Q

Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.

Explanation of Solution

Want to see more full solutions like this?

Chapter 14 Solutions