FIN 571 Week 2 Partnership
The next option is the structure of partnerships. Partnerships occur when two or more people join together to form a business. You have the options of two kinds of partnerships which are limited and general. The general partnership is basically the same as a sole proprietorship and the tax structure is such that all partners are responsible for the debt and liabilities of the company (Parrino, Kidwell, & Bates, 2012). One way to avoid this is to create a limited partnership. When a partner is a limited partner, they cannot be involved in the daily operations of the business and they relinquish their ability to be actively involved in managing the business. They also have limited liability regarding any debts and judgments against the business. There are some cases where one partner can be held liable for the negligent acts of another partner within the business, and creditor may pursue a partner’s personal asset as compensation
The next option is the structure of partnerships. Partnerships occur when two or more people join together to form a business. You have the options of two kinds of partnerships which are limited and general. The general partnership is basically the same as a sole proprietorship and the tax structure is such that all partners are responsible for the debt and liabilities of the company (Parrino, Kidwell, & Bates, 2012). One way to avoid this is to create a limited partnership. When a partner is a limited partner, they cannot be involved in the daily operations of the business and they relinquish their ability to be actively involved in managing the business. They also have limited liability regarding any debts and judgments against the business. There are some cases where one partner can be held liable for the negligent acts of another partner within the business, and creditor may pursue a partner’s personal asset as compensation
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