Advanced Accounting 14th Edition
14th Edition
ISBN: 9781260726442
Author: By Joe Ben Hoyle And Thomas Schaefer And Timothy Doupnik
Publisher: Mc Grawhill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 1Q
To determine
Describe the advantages and the disadvantages of operating a business as a
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Explanation of Solution
The advantages of operating a business as a partnership rather than as a corporation are:
- The ability to make virtually arrangements defining their relationship to each other that the partners desire.
- Less hassle of forming a partnership.
- Fixed oral agreement is required to form a partnership.
- Operating costs are reduced and partners can make decisions which they desire.
- Partnership can claim losses as tax and do not pay taxes.
The disadvantages of operating a business as a partnership rather than as a corporation are:
- Partners have unlimited liability.
- Every partner is liable to pay the debts incurred.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
What are the advantages of operating a business as a partnership rather than as a corporation? What are the disadvantages?
How does running a company as a partnership as opposed to a corporation benefit the parties involved? What are the drawbacks of this approach?
What are the benefits of the corporation in comparison with the partnership and proprietorship structures? How is equity treated and reported differently in this structure?
Chapter 14 Solutions
Advanced Accounting 14th Edition
Ch. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - Prob. 3QCh. 14 - Prob. 4QCh. 14 - Prob. 5QCh. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - Prob. 8QCh. 14 - Prob. 9QCh. 14 - Prob. 10Q
Ch. 14 - Prob. 11QCh. 14 - Prob. 12QCh. 14 - What is a partnership dissolution? Does...Ch. 14 - Prob. 14QCh. 14 - Prob. 15QCh. 14 - Prob. 16QCh. 14 - Prob. 17QCh. 14 - When a partner withdraws from a partnership, why...Ch. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Prob. 5PCh. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Prob. 11PCh. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 14PCh. 14 - Prob. 15PCh. 14 - Prob. 16PCh. 14 - Prob. 17PCh. 14 - Prob. 18PCh. 14 - Prob. 19P
Knowledge Booster
Similar questions
- What does it mean to be a company? Instead of forming a partnership, why would the founders of the company choose to do so instead? What are the benefits and drawbacks of forming a company?arrow_forwardWhat are the main advantages of a company compared to a sole trader and a partnership?arrow_forwardWhat choices are available to a group of persons creating a business? Why is it possible that a partnership is not the optimal company structure? What additional possibilities do they have?arrow_forward
- Which of the following legal forms of organization is most expensive to organize? O corporations O limited partnership O sole proprietorships O partnershipsarrow_forward1.What are the main advantages of proprietorships, partnerships, and limited liability companies? 2.What are the disadvantages of a partnership over a limited liability company form of organization for a profit-making business?arrow_forwardExplain the advantages and disadvantages of the partnership versus the corporate form of business.arrow_forward
- What is a corporation? Why might founders have chosen to form a corporation rather than a partnership? What are the advantages and disadvantages of incorporation?arrow_forwardWhat is the major difference between the franchisee–franchisor relationship and the agent–principal relationship? How is the agency relationship used in a corporation and a partnership?arrow_forwardWhat options does a group of people have when forming a business? Why might a partnership not be the best form of business organization? What other options might they have?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT