18. In the absence of an agreement to the contrary, profits of a partnership are
ID: 2587342 • Letter: 1
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18. In the absence of an agreement to the contrary, profits of a partnership are shared: A. on a pro rata basis relative to each partner's capital contribution. B. as determined by a majority of partners at the time of distribution. C. equally among the partners. D. None of the above. The advantage of a corporation over a partnership is: A. perpetual existence. B. shares are easily transferable to another person. C. it is easier to raise funds. D. All the above are correct. 19. The business form that is taxed as a partnership and gives all owners limited liability, is: A. a limited liability company B. a limited partnership. C. a close corporation. D. a general partnership. 20.Explanation / Answer
18. In the absence of an agreement to the contrary, profits of a partnership are shared: C. equally among all the partners, regardless of their contribution in the business.
19. The advantage of a corporation over a partnership is:
A. Perpetual Existance- unlike partnership, corporation doesn't close down after the expiry of any shareholder, director, etc
B. To transfer or sale the portion of holding into a business by a partner the whole business get disturbed. But there is no such probles or harassment in corporation as one can easily transfer his shares to another without disturbing the continue operation of the business.
C. In partnership business to raise fund they have to depend upon the partners only or elsewhere the bank. But for corporations they have huge pool of choice to raise the fund. Like sale of stocks, creating different security types like preferred stocks, availing debentures, notes etc.
D. All of the above are correct - this option would be the answer of the question.
20. The business form that is taxed as a partnership and gives owners limited liability, is called as A. a limited liability company.
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