Accounting For Partnerships: Organization and Operation: ACCT 501
Accounting For Partnerships: Organization and Operation: ACCT 501
Accounting For Partnerships: Organization and Operation: ACCT 501
partnerships
Partnerships: Organization and Operation
2
Partnerships
The Uniform Partnership Act defines a
partnership as: "an association of two
or more persons to carry on, as co-
owners, a business for profit".
Partnerships generally are associated
with the practice of law, medicine,
public accounting and other
professions, and also with small
business enterprises.
Partnerships: Organization and Operation
3
Partnerships (contd.)
General partnership: in which all
partners have unlimited personal liability
for debts of the partnership.
Limited liability partnerships (LLPs):
individual partners of LLPs are
personally responsible for their own
actions and for the actions of
employees under their supervision.
Partnerships: Organization and Operation
4
Partnerships (contd.)
The LLPs as a whole, like a general
partnership, is responsible for the
actions of all partners and employees.
Since the LLPs are the prevalent form
of partnerships and the issues of
organization, income-sharing plans and
changes in ownership of LLPs are
similar to those of general partnerships,
LLPs are discussed in this chapter.
Partnerships: Organization and Operation
5
Organization of a Limited Liability
Partnership (LLP)
Basic Characteristics of the LLP:
1. Ease of Formation.
2. Limited Life.
3. Mutual Agency.
4. Co-Ownership of Partnership Assets
and Earnings.
Land 80,000
Zell, Capital 80,000
To record admission of Zell to partnership.