StudentShare solutions
Triangle menu

Partnership vs.Corporation (Taxation) - Assignment Example

Not dowloaded yet

Extract of sample
Partnership vs.Corporation (Taxation)

Advantages and disadvantages related to becoming a corporation Incorporating a business has many merits attached to it. A corporate business has many structures that make it enjoy protection from liability. Corporation also has ease of growth. It is also easy to transfer ownership to another. It is flexible and never rigid. The major disadvantage of a corporation is the double taxation that is levied upon the firm/corporation (Piper, 2008). The taxation is levied at the corporation level and the individual earnings are taxed. There are also fee charged for maintaining the status of a corporation and that of keeping and running corporate meetings throughout the year. In spite of these demerits attached to the corporation, it is important to note that it is easy for a corporation to go public. A corporation enjoys liability protection. In a corporation, owners and stakeholders are given indemnity from the debt incurred by the corporation. In case of the default and the bankruptcy of a corporation, owners and stakeholders do not come to be part of the debt. Therefore, individuals in the corporation cannot suffer. The personal assets and corporation assets are not interfered with in case a corporation is unable to pay its debts. Thought the corporation face double taxations; there exist cases where they are given tax breaks. A corporate business gains trust from the public and business entities as it is considered a professional entities. These give it business advantage due to its status and legality. Advantages and disadvantages of being in partnership Partnership is an agreement reached between two or more people to finance an organization or a business and run it together. In partnership, the business is independent from the partners however; the losses and profits flow through their individual taxes. Advantages of business partnership include: There are no complex details attached to establishing a partnership. It is easy to form The capacity to raise funds is greater as more partners have a higher bargaining power. They can thus get access to loans easily. There is a wider range of expertise skills. People often have different knowledge and skills; this puts the organization or the business at an advantaged position because of the possibility of varied range of knowledge and skills. Partnership can be cheaper t operate as each partner specializes in a section thus higher level of concentrated output. Partnership is important because partners mean good for the business; they thus provide moral support for each other. They may also open up for creative performance as they brainstorm Disadvantages of Business Partnership Business and the individual partners are directly liable for any action of the business and other partners The profits have to be shared in amongst people. This may raise conflict when one partner or partners feel that their contributions to the business are greater than other. This may create conflicts. There are various limitations associated with partnership, which makes it not conducive for rapid expansion. The main demerit associated with partnership is that individual members are liable to a greater degree for the liability of the business. 2. How partnership minimizes tax liability. Prepare a response as to why partnership was the best option Partnership is advantageous because it limits personal obligation to an individual but it indebts it to the partners in the organization collectively. Partnership is also ...Show more

Summary

Partnership vs. Corporation (Taxation) Name Institution Partnership vs. Corporation (Taxation) 1. Compare and contrast the advantages and disadvantages inherent in electing to become a partnership and a corporation. Every business seeks to minimize losses and maximize profits…
Author : donato02
Partnership vs.Corporation (Taxation) essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the assignment on your topic
"Partnership vs.Corporation (Taxation)"
with a personal 20% discount.
Grab the best paper

Related Essays

Taxation
Implications of change in status “An employee will pay taxes on earnings from his employment. A self employed will pay taxes on the profits of his trade.” (Christopher Jones)i As per HMRC “A worker’s employment status, that is whether they are employed or self employed, is not a matter of choice.
6 pages (1500 words) Assignment
Taxation
Income tax involves the amount taxed on individual earnings such as salaries, business profits, sales, corporate profits, capital gains and other sources of income. On the other hand, National insurance contributions include the amount taxed on contributions towards insurance policies.
8 pages (2000 words) Assignment
Taxation
Being self-employed means you are in control of what you do and are able to organise your schedules. It also presents many opportunities, perhaps the utmost being a fresh start to life, of a
10 pages (2500 words) Assignment
Taxation
On the other hand, National insurance contributions include the amount taxed on contributions towards insurance policies. These two systems worked independently in the past and the tax authorities maintained
8 pages (2000 words) Assignment
Taxation
Taxes also pay for education, highway and public transportation and also retirement benefits. By use of taxation the government can either encourage or discourage
8 pages (2000 words) Assignment
Taxation
His mailing address is 3115 Rue Sartelon Montréal and his postal address is 10-132/2MAINSTESE Montreal Quebec. As of 31st December 2013, Charles was still a residence of Quebec, where he has lived ever
5 pages (1250 words) Assignment
Taxation
Mcgee (2003) noted that taxation is one of the major powers that the government has over the people within its territory. The taxation system enables governments of various countries to finance their expenditures by imposing their
7 pages (1750 words) Assignment
Taxation
Mcgee (2003) noted that taxation is one of the major powers that the government has over the people within its territory. The taxation system enables governments of various countries to finance their expenditures by imposing their
7 pages (1750 words) Assignment
Partnership taxation
All Assets basis 90,000 dollars and it shows the contributed assets in the partnerships ownership. This is inside basis of ABC partnerships. All Assets Value add up to 115,000 dollars and this signifies partnership assets book
1 pages (250 words) Assignment
Taxation
Conversely, tax evasion involves escaping tax payment through illegal means. In this case, an individual misrepresents or conceals the actual state of his or her affairs to tax authorities such as the presentation of dishonest tax reports (James,
3 pages (750 words) Assignment
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation