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12 Cards in this Set
- Front
- Back
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Partnership |
An unincorporated association of two or more people to pursue a business for profit as co-owners. |
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Partnership Characteristics |
Voluntary association, partnership agreement, limited life, taxation, mutual agency, unlimited liability, and co-ownership of property. |
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Limited partnerships |
Ltd. Has two classes of partners, general and limited. |
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General partner |
Assumes management duties and unlimited liability for the debts of the partnership. |
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Limited Partners |
Have no personal liability beyond the amounts they invest in the partnership. Have no active role except as specified in the partnership agreement. |
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Limited liability partnership |
LLP. Protects innocent partners from malpractice it negligence claims resulting from the acts of another partner. |
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S Corporations |
Corporations with 100 or fewer stockholders can elect to be treated as a partnership for income tax purpose. Salaries are considered expenses |
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Partnership Investment Posting |
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Absence of an agreement - allocating |
Partners will share income or loss equally if there is no agreement |
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Common Methods to ÷ Income & Loss |
Stated ratios, the ratio of capital balances, and salary and interest allowances any any remainder to a fixed ratio |
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Stated ratios |
Aka income and loss sharing ratio, profit and loss ratio (P&L). Gives each partner an agreed fraction of the total. |
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Allocation on Capital Balances |
Assigns an amount based on the ratio of each partners relative capital balance |
