Characteristics of partnerships
Two or more individuals agree to share equally in both responsibility and liability.
What is General Partnership?
Default type when formed. All partners are General partners and fully liable for debts.
What is General Partnership?
Increases a partner's basis even when the partnership is in a loss.
What is partnership debt?
An app used to listen to music. It was founded by Daniel Ek and Martin Lorentzon
What is Spotify?
These two approaches track partnership equity.
What are tax and book capital?
Uniform state law adopted by most states to establish rules for partnerships.
What is Uniform Partnership Act (UPA)?
This type of partnership: (1) Must register entity with state (2) have at least one partner is General partner, and one is Limited (3) Limited partner cannot actively participate in business, but also only liable up to personal investment
What is Limited Partnership?
This type of partnership will generally only have nonrecourse debt.
What is an LLC?
An app used to give navigational directions anywhere. It was co-founded by Lars and Jans Rasmussen.
What is Google Maps?
This is the best advantage of a partnership vs an S Corp when considering equity and the allowance of variances.
What is disproportionate distributions?
Work habits, goals, management styles, ethics, and general business philosophies.
What is Potential & Easy Conflicts/Disagreements?
This partnership must file Articles of Organization with state and members have limited liability, and can actively participate
What is a Limited Liability Company?
Partner bears the “risk of loss” for a liability to the extent that if things go bad and the partnership can’t pay the liability, the partner would have to come out of pocket to pay off the creditor, with no right to reimbursement from the partnership or another party.
What is a Recourse Liability?
They produce many well-known hygiene products. They are co-founded by William Proctor and James Gamble.
What is Proctor & Gamble?
This type of equity is included in a partner's basis if they sell their interest in the partnership.
What is tax basis?
Profits, income, and losses are passed directly to partners/owners without being taxed.
What is Pass-Through Entity?
This type of partnership must register the entity with the state similar to LLC, but partners are fully liable for personal actions and of those they supervise.
What is a Limited Liability Partnership?
Liability for which no partner bears the economic risk of loss for the liability.
What is Nonrecourse Liability?
They are a well-known ice cream brand. They are co-founded by Ben Cohen and Jerry Greenfield.
What is Ben & Jerry's?
These 2 types of differences make book and tax capital to not match.
What is temporary and permanent?
Act in the best interest of their partnership, key to protecting partners and the business itself.
What is Fiduciary Duty?
Like most partnerships this one must register the entity with the state, similar to limited partnerships, but general partners are not personally liable.
Limited Liability Limited Partnership
Debt that is borrowed in connection with the activity of holding real property.
Qualified Nonrecourse Liability (QNR)?
They are known for their complex advancement in the technology industry. They were co-founded by Paul Allen and Bill Gates.
What is Microsoft?
When beginning equity does not match the equity in the client's year end financials what is the first step to resolving the variance.
What is confirm that last year's book adjusting entries were recorded by the client?