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What are the advantages and disadvantages of partnerships. Why might partners form a limited liability company...

What are the advantages and disadvantages of partnerships. Why might partners form a limited liability company or a corporation? Discuss corporations you may be familiar with personally or from the news that have ousted their Chief Executive Officer.

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Expert Solution

Advantages of Partnership
1 Partnership is better than sole proprietorship as two or more persons can join together and
for a partnership.
2 Partnership is easy to establish and start up cost is lower than corporation
3 Each partner will contribute capital, thus more capital is available for business.
4 Partnership firm does not pay taxes as an entity rather each partner pay tax on his share of
income in his personal return.
Disadvantages of Partnership
1 Under Partnership, the liability of the partners for the debts of the business is unlimited.
2 Every partner is liable "jointly and severely" for the partnership's debts.
Partners might form LLC or a corporation as LLC and corporations are corporate structures
in which the members of the company are not personally liable for the companies debts, as
in the case of partnership.
Uber ousted their CEO Travis Kalanick
Intel ousted their CEO Brain Krzanich

ekkarill92 answered 1 year ago
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