What is a partnership? Explain the advantages and the disadvantages of a partnership
What will be an ideal response?
A partnership is an association of two or more people who co-own a business for the purpose of making a profit.
Advantages of a partnership:
? Easy to establish
? Complementary skills
? Division of profits
? Larger capital pool
? Ability to attract limited partners
? Minimal governmental regulation
? Flexibility
? Taxation
Disadvantages of a partnership:
? Unlimited liability of the general partner(s)
? Not effective in capital accumulation
? Difficulty in disposing of partnership interest without dissolving partnership
? Lack of continuity
? Potential for personal and authority conflicts
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While preparing a tax return for a new client and reviewing the client's prior-year return, a CPA noticed an error made by the client's former tax preparer. According to Treasury Department Circular 230, which of the following is the CPA specifically required to do in this case?
A. Contact the tax preparer who made the error and suggest that an amended return be prepared for the client. B. Inform the client of the error and insist that the return be amended. C. Inform the client of the error and advise of the consequences. D. Advise the client to contact the tax preparer of the prior-year return.
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A) agency culture and track record B) relationship between the agency and the medium's sales representative C) size of the agency D) creativity of the media buyer