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Wednesday, 24 July 2019
Business entity Essay Example | Topics and Well Written Essays - 250 words
Business entity - Essay Example The limited partnership is not subject to federal income tax. The limited partnership allows the acceptance of two partners who contribute a different fund amount and a third partner who only contributes his or her services in lieu of capital, considering each of the owners has a spouse and adult children. Normally, the limited partnerââ¬â¢s contribution to the partnership is lower than the general partnersââ¬â¢ contributions. The limited partners are prohibited from participating in the management decisions of the partnership. Only general partners are allowed to make management decisions (Clifford, 2008). In terms of limited partnershipââ¬â¢s liability, the creditors can get the general partnerââ¬â¢s family assets to pay for the liabilities of the limited partnership. On the other hand, the creditors cannot get the limited partnerââ¬â¢s family assets to pay for the liabilities of the limited partnershipââ¬â¢s liabilities (Clifford, 2008). The best form of business for a small business is limited partnership. For a limited partnership, a small business can easily grow to become a big business when the most opportune moment comes. As the business profits continue, all the limited partnershipââ¬â¢s partners can increase the store size, sell more product types, or up a new branch in another locality (Clifford, 2008). Analyzing the above information, many persons want to form a limited partnership. The limited partnership is tax exempt. The creditors can only get the general partnersââ¬â¢ assets. Only the general partners can make partnership decisions. Convincingly, the limited partnership works best in the above business
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