Wgu Lit1 Task 2 Essay

• PROFIT RETENTION – Limited partners usually receive a specified amount of profit that is predetermined in an agreement or based on the contribution of the partner. • LOCATION – Limited partners have no say in expansion or relocation of the company in which they are partners with. • CONVENIENCE/BURDEN – One convenience of having limited

Many believe that liability is a biggest issue in a general partnership than in a sole proprietorship. The owners of the company are still fully liable for any debts the company may accrue as well as the liability for any lawsuits that may be brought against the company. However, the bigger issue in a partnership is that now each partner can be liable for the other partner’s actions. If one partner is sued for malpractice, the other partner may suffer because of it.

partnership to continue, in the event a partner withdraws from the group. Similar to sole proprietorship, general partnerships tend to have a difficult time rounding up funding and resources, since most of the necessary capital comes from each partner's personal assets. This in turn may hinder longevity and growth of the organization. 4. Control In a typical general partnership, all partners will have equal rights and control over the business. It allows any partner to act on behalf of the business to make decisions and negotiation with

Income taxes- All income generated through a sole proprietorship is taxed by the Internal Revenue Service. This is reported on the owner's personal tax return.

Liability- The general partner would be liable for all unlimited responsibility on all tasks and debt, while the limited partner will not loss more than their investment.

A sole proprietorship is a form of business that is owned by a single individual.  • Liability – Due to the lack of legal distinction between the owner and the business, the owner is fully responsible and liable for all debts that the business incurs in the same manner that an individual is fully responsible and liable for all debts that they incur. There is no legal distinction between the assets of the owner of the sole proprietorship and the business; this means that creditors have the ability to come after the owner’s business and personal material assets.   Income Taxes – Since the business is the same as the owner of the sole proprietorship, all profits or losses from the business are filed by the

Income Taxes: The owner of a Sole Proprietorship pays taxes in the earnings of the company as personal income.

responsible for business debt, and has one or more limited partnership who are only liable to

Limited Partnership: This partnership consists of a blend of both general and limited partners. This kind of agreement/partnership lets the general partner manage the entire operation, but they are still fully liable for debts. The limited partner only invests his/her money, and can only lose what they invested.

General Partnership: Occurs when two or more individuals get together to operate a business with the intention of making profit. Each individual is a general partner of the business and all profits and losses are shared between the partners. General partnership agreements can be a written or verbal agreement.

disagreements will happen (is not when it happens). Everyone that runs a business always has his or

General partnerships are legally recognized entities, with a separate identity and existence. Creation, regulation, and characteristics are commonly defined and controlled by state law and may vary. However, despite such variations, many states have adopted common provisions of the Uniform Partnership Act (UPA).

A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities.

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

One issue with general partnerships is how to value a partner’s share of the business. Most times when the articles of partnership contract is agreed they will include a buy/sell agreement that contains details of a withdrawing member of the partnership.