Advanced Accounting Chapter 9 study guide 100% solved

Advanced Accounting Chapter 9 study guide 100% solved Partnerships - answerA partnership is defined as "an association of two or more persons to carry on a business as co-owners for profit." Partnership Advantages - answerFlexibility in defining relationships. Profits and losses, and management operating decisions, shared independent of ownership percentages. Ease of formation and dissolution. Taxes "flow-through" to the partners. Partnership Disadvantages - answerUnlimited liability incurred by each partner (they are "jointly and severally" liable). Mutual agency (each partner has right to incur liabilities in the name of the partnership). Inability to participate in various corporate tax benefits. Subcharter S Corporation (Alternative Legal Forms) - answerLegal characteristics of a corporation. Ownership limited to 100 stockholders. Owners limited to individuals, estates, and certain tax-exempt entities and trusts (no corporate owners allowed). Profit passes to owners as a partnership. Limited Partnership (LP) (Alternative Legal Forms) - answerLimited partners not allowed to participate in management. Losses are restricted for limited partners to the amount invested. Must have one or more general partners who assume responsibility for all obligations