LIT1 Task 1 Essay

| It is impossible to add additional owners and to pass on business, business dies with owner. A single owner

In a general partnership there is also the issue of control. Whereas in a sole proprietorship the sole owner has full control in the business, in a general partnership the control is split equally between the partners. This can lead to issues when the partners do not agree on the direction they want to take the company in regards to growth or other

When it comes to partnerships Alex, Bill, Carl, and Devon will have two options- a general partnership or a limited partnership. Partnerships are beginning to be a business form of the past. Once upon a time, partnerships were “the default form of business and provided the benefit of pass-through taxation, but lacked the important feature of limited liability” (Chrisman, 2010, p. 465). In a general partnership, each partner associated with the entity will be held liable for their own business decisions as well as

Because the general partner holds majority of the interest and the limited partners are prohibited for participating in the control of the business.

Liability All liabilities are the responsibility of each partner. In the event of litigation, any creditors can go after the personal assets of each partner to recover any debt owed. But since liability is spread out between the owners, one may feel less risk is being taken. 2. Income Taxes General partnership may also benefit from pass-through taxation, meaning the partners are taxed like sole proprietors. Business income is reported on the personal tax filing while business losses can be deducted to reduce personal tax liability. The partnership itself is not subject to federal income tax. However the partnership needs to file an information return utilizing the IRS Form 1065. 3. Longevity or continuity of the organization Once the partnership agreement is fulfilled, the general partnership may dissolve. A buy/sell agreement may be included in the articles of the partnership to allow the

The General Partner has exclusive management and control over all aspects of the Fund 's business. The Limited Partners have no right to participate in the Fund 's management except for certain limited voting rights as specifically set forth in the Fund 's LP Agreement, which include the election of a successor General Partner and the dissolution of the Fund. Matters requiring limited partner approval generally require the vote or consent of a majority-in-interest of the Limited Partners.

In a C- Corporation the profits are divided among the stockholders. The amount of profits depend on the percentage stocked owned. For example if you owned 15 percent of the corporation’s stock, you may receive 15 percent of the profits. The more stock you own the greater the return.

Longevity/Continuity- The partnership would keep operating outside of the limited partner's death, as per usual, however, if a general partner dies, and the agreement hasn't covered the possibility of their death and also agreed that the business will keep running past the death of a general partner, the partnership will immediately dissolve.

* Taxes are paid through the corporation on a corporate tax return. It is separate from the owner’s income taxes, commonly referred to as shareholders. Shareholders also include income or losses on stocks sold or dividends earned on their yearly individual tax return.

Sole Proprietorship: This is a type of business is where the business and the owner are one in

Because there are no shareholders, the partners receive all the profits. This comes as a major advantage. Also an advantage, general partnerships have simplified taxes. This is the biggest disadvantage this type of business has. The business itself does not pay taxes. Any profits or losses recorded by the business are passed through each partner. Taxes are still filed, but taxes are not charged to the business. The partners must also file tax returns that show their individual shares of the company's profits and losses although partners are not treated as employees. Every business type has a legal liability. For general partnerships, this comes as a disadvantage. Since general partnerships are in part owned by

Income Taxes: A sole proprietor and their business are taxed as a single unit. All profits, no matter how big or little, are filed on the standard Form 1040 along with a Schedule C. All profits are considered personal income.

Longevity: Similar to a sole proprietorship, in case of death or incapacity of a partner the

A limited partnership is similar to a general partnership. It does have several key differences. While a general partnership has to have at least 2 general partners a limited partnership has to have at least 1 general partner and 1 limited partner. A limited partner does not run the business. A limited partner is similar to an investor or shareholder. A limited partnership also should have a partnership agreement between the general and limited partners.It can be an oral or a written agreement. This partnership agreement can contain for example; how the business will be conducted,distribution of labor or how profits are divided.The partnership has to be registered with the Secretary of State where the business is

General partnership can be as simple as a written agreement between two people. General partnership require a small amount of red