Lit 1 Task 1 and 2

| A general partnership allows for a pooling of capital and talent and a sharing of the risk. Additional benefits to a general partnership include additional expertise in decision making and a sharing of the workload. General partnerships are easy and inexpensive to start up.

Limited liability means it does not exceed the amount invested in a partnership or limited liability company. The limited liability feature is one of the biggest advantages of investing in publicly listed companies. While a shareholder can participate wholly in the growth of a company, his or her liability is restricted to the

partnership is having the addition of outside fund while not losing control of the company. While you have invested as a limited partner, it does not give you any say on how the company should be ran. C-CORPORATION: Corporations are defined as a group of people authorized to act as a single entity which is recognized under state/corporate laws. A corporation is treated like a “person” and has the same rights as you or I except it is not protected by Fifth Amendment rights.

Many believe that liability is a biggest issue in a general partnership than in a sole proprietorship. The owners of the company are still fully liable for any debts the company may accrue as well as the liability for any lawsuits that may be brought against the company. However, the bigger issue in a partnership is that now each partner can be liable for the other partner’s actions. If one partner is sued for malpractice, the other partner may suffer because of it.

When it comes to partnerships Alex, Bill, Carl, and Devon will have two options- a general partnership or a limited partnership. Partnerships are beginning to be a business form of the past. Once upon a time, partnerships were “the default form of business and provided the benefit of pass-through taxation, but lacked the important feature of limited liability” (Chrisman, 2010, p. 465). In a general partnership, each partner associated with the entity will be held liable for their own business decisions as well as

Why is the fiduciary duty between the general partner and limited partners even greater than the fiduciary duty between partners in a general partnership?

Without a partnership agreement, loss of income and profits are split between partners that wish. The partners then report individual amounts divided in their tax returns, pay taxes accordingly. Gains and losses are passed directly to shareholders, with each LLP partner personally liable only for its own negligence or the negligence of an employee who is under the direct supervision of the partners. The other

34. The limited liability provided to limited partners means that they are not responsible for the debts of the business

SOLE PROPRIETORSHIP: Has only one owner. Easy to start up. Some of the advantages are: owners may do whatever they want to with the business and if they want to go on vacation they can. One of the disadvantages they cannot bring in another person to help run the business. This business form is particularly common.

Liability- The general partner would be liable for all unlimited responsibility on all tasks and debt, while the limited partner will not loss more than their investment.

PROFIT RETENTION- The company’s profit can be used in two ways. The profit can either be invested in the business or it will be paid out to the shareholders as dividends. Dividends are based upon on the shareholders stake.

This is typically determined by how much money each limited partner is investing in the company.

* Limited Liability - Unlike partnerships and sole proprietorships, corporate shareholders are not liable for any of the corporation's debts.

Limited partnership: Owners are distinguished as either general or limited partners. Limited partners are only liable about their contribution to the partnership involving funds, equipment and other property.

Longevity: Similar to a sole proprietorship, in case of death or incapacity of a partner the