Partnership Flashcards
(5 cards)
1
Q
mutual agency
A
every partner is a mtual agent of the firm. any partner can bind the business to a contract within the scope of its regular business operations
2
Q
if either partner cannot pay his or her part of the dbt
A
the other partner must pay the total
3
Q
features of partnership
A
limited life
mutual agency
unlimited liability
co-ownership of property
no partnership income tax
partnership capital accounts
4
Q
advantages of partnerships
A
Pooling of resources and multiple skills of individual partners
- Ease of formation
- Subject to little regulation (vs Corporation Act)
- Ease of decision making (there is no board of directors)
- Potential tax advantages
5
Q
disadvantages of partnership
A
Mutual agency
- Unlimited liability
- Relationships among partners may be fragile (disputes)
