Question.3016 - Instructions Review the associated chapter's opening feature involving Chance Claxton and Lynn Julian, and their company, Kids Konserve. Assume that Chance and Lynn, partners in Kids Konserve, decide to expand their business with the help of general partners. Required 1. What details should Chance, Lynn, and their future partners specify in the general partnership agreements? 2. What advantages should Chance, Lynn, and their future partners be aware of with respect to organizing as a general partnership? 3. What disadvantages should Chance, Lynn, and their future partners be aware of with respect to organizing as a general partnership? Write a memo in Word to Chance and Lynn detailing the above information. You will be graded on how well you address the questions. Addressing the questions involves identifying relevant facts, applying the chapter concepts,, and answering each question completely. Proper APA formatting is expected and required (cited sources, reference page, etc.). Supplement and synthesize your analysis with outsides scholarly sources. For assistance with APA citations, please visit the following links: The American Psychological Association Website: http://www.apastyle.org/ The APA site has numerous links (see “most popular”), but you may want to view the tutorial if you are completely new to APA: http://www.apastyle.org/learn/tutorials/basics-tutorial.aspx Note: This assignment will be submitted for plagiarism detection. You may not copy and paste any part of your submission, (not even from the text book) unless it is quoted and cited. Your submission must return less than 20% similarity index in order to be graded.
Answer Below:
Chance, Lynn, and their future partners should specify the following details in the general partnership agreements. The Partnership agreement should include; 1) The names and contributions made by each of the partners, 2) The rights and duties of each partner with respect to the activities of Partnership, 3) The ratio of sharing of income and losses by each partner, 4) In case of a partner wants to withdraw, then the withdrawal arrangement, 5) Dispute procedures, and the ways to resolve the disputes 6) The rules regarding the admission of partners, and 7) The rights and duties of remaining partners in the event one of the partner dies. The advantages of forming a partnership are; 1) When two or more people come together, it may happen that one person has resources and another person has expertise. Thus they both can collaborate to form a partnership to benefit each other. 2) The profits in Partnership are only taxed once on the individuals Income and not on what partnership earns. 3) The Simple operating structure is also an advantage for Partnership business which should be kept in mind. 4) The flexibility of Partnerships is also a key advantage. The flexibility in admission or withdrawals of partners or any other matter. This kind of organization is one of the most flexible ones. The Disadvantages are; 1) Collaboration can act as advantage and a disadvantage, because conflicts are bound to happen in partnerships. The disagreements may crop up due to any reasons. 2) The authority of partners may be a problem as the decision of one partner has to be agreeable by all, thus sometimes this may create a problem. 3) The unlimited liability of partners with respect to personal property may be at stake, is another disadvantage of such forms of business. 4) Sudden withdrawal or death of a partner may result in the end to the partnership, even though being run successfully. This kind of problem cannot be resolved until and unless a strong bond amongst partners. 5) The ownerships are not transferrable in case of Partnership as easily as they in a Corporation. This is another disadvantage which the partners should keep in mind.More Articles From Accounting
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