Answered: Two of the business organizational…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1TP: While sole proprietorships and corporations are the most popular forms of business organization, the...

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Two of the business organizational forms your book talks about are limited liability company (LLC) and partnership.

What is a limited liability company (LLC)? And how does it differ from partnership? Identify three ways in which they

differ, Be brief and to the point.

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.

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