Contract And Carry On A For-Profit Business

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According to Business Dictionary (2017), a partnership is a written agreement between two or more individuals who join as partners to form and carry on a for-profit business. The partner should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be resolve how future partners will be admitted to the partnership, how partner can be bought out and so on. Not every partner is necessarily involved in the management and day-to-day operations of the venture. In some jurisdictions, partnerships enjoy favorable tax treatment relative to corporations. A partnership does not have a separate legal existence like an incorporated firm, and the partners are jointly and severally liable for …show more content…

General partnership: Partners divide responsibility for management and liability as well as the shares of profit or loss according to their internal agreement. Equal shares are assumed unless there is a written agreement that states differently.
2. Limited partnership: Limited Partnership and Partnership with limited liability. Limited means that most of the partners have limited liability (to the extent of their investment) as well as limited input regarding management decisions, which generally encourages investors for short-term projects or for investing in capital assets. This form of ownership is not often used for operating retail or service businesses. Forming a limited partnership is more complex and formal than that of a general partnership.

Partnership Advantages: Easy …show more content…

Like sole proprietorships, partnerships retain full, shared liability among the owners (Michael Spadaccini, 2009). Partners are not only liable for their own actions, but also for the business debts and decisions made by other partners. If the company gets sued or hauled into bankruptcy court, all fines are the responsibility of the individual partners. Also, most partnerships allow any partner or owner in the company to make decisions on behalf of the company in general. Even if a partner is acting on their own, all partners are responsible for the outcome of those

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