General Partnerships--- EXPLAIN WHY A GENERAL PARTNERSHIP IS THE BEST, DISCUSS T
ID: 388767 • Letter: G
Question
General Partnerships--- EXPLAIN WHY A GENERAL PARTNERSHIP IS THE BEST, DISCUSS THE ADVANTAGES AND BENEFITS OF THIS KIND OF PARTNER SHIP
A general partnership involves two or more owners carrying out a business purpose. General partners share equal rights and responsibilities in connection with management of the business, and any individual partner can bind the entire group to a legal obligation. Each individual partner assumes full responsibility for all of the business's debts and obligations. Although such personal liability is daunting, it comes with a tax advantage: partnership profits are not taxed to the business, but pass through to the partners, who include the gains on their individual tax returns at a lower rate.
EXPLAIN WHY A GENERAL PARTNERSHIP IS THE BEST, DISCUSS THE ADVANTAGES AND BENEFITS OF THIS KIND OF PARTNER SHIP
Explanation / Answer
I believe that general partnership is a business type which is one of the best among the options that are available because of various reasons and the most important of them is the ability to establish the business very easily as the paperwork involved in such a type is minimum in comparison to that of other businesses. As it is easy to create, it is easy to dissolve as well which will not require much paperwork in this context. Another advantage of the same is the tax filing because it is simple as there is no case of double taxation and each partner can file the same IRS form 1065. For small businesses general partnership is the best option as it saves personal income tax of the proprietor as well.
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