Accounting technicians scheme west africa
Minimum government regulations
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- A.11.2 Partnership
- A.11.2a Features of Partnership The features of partnership areas follows i) Based on an agreement
- Profit and loss sharing
- Unlimited liability
- Restriction in the transferability of shares
| Minimum government regulations: Government does not interfere with the operations of the business. A.11.1b Advantages of Sole Proprietorship (i) Easy formation ii) Benefits of small scale operations iii) Inexpensive management iv) Better control A.11.1c Disadvantages of Sole Proprietorship (i) Lack of continuity ii) Limitation of size iii) Slow technological progress iv) Limited ability to attract and retain capable employees v) Limited access to sources of capital vi) Limitation of management skills vii) Unlimited liabilities 15 A.11.2 Partnership This arrangement occurs when two or more individuals come together and agree to organize and operate an enterprise jointly with profit as the motive. They contribute their capital and jointly offer their services for the success of the business. The legal basis for this arrangement is contractual and it specifies the duties and rights of the partners. The practice of law, insurance, finance, accountancy and other similar professions abound with partnership form of ownership. In the course of their contractual activities, the partners specialize in one or more aspects of the activities of the firm. [ Furthermore, this arrangement becomes very useful as away for the partners to contribute their resources such as capital, time, effort and services in order to earn profit which can be shared on an agreed basis. A.11.2a Features of Partnership The features of partnership areas follows i) Based on an agreement: This type of business is usually formed on the basis of an agreement between two or more persons to carry on business. The terms and conditions of partnership are usually stated in the Partnership Deed. ii) Profit and loss sharing The partners are entitled to share the profits realised and also bear the loss. iii) Agency relationship: The business can operate such that all partners will participate in the operation, with each being a principal partner. Any of the partners can also act on behalf of other partners as agent. By this, ever partner can bind the firm by his acts. iv) Unlimited liability In case some obligations arise and the partnership assets are not sufficient, private properties of the partners can betaken to defray the liabilities of the firm. vb Common management Every partner has aright to participate in the management of the business. Where a partner does not partake in the running of the business, it becomes imperative that his consent besought before taking strategic business decisions. vi) Restriction in the transferability of shares No partner can transfer his/her shares without the consent of all other partners. Download 3.37 Mb. Share with your friends:
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