Accounting for Partnership Business Essay - 2574 Words

Table of Contents Introduction 1 Sole trader 1 Partnership 2 Company 2 Registration Process 3 Financial Report 5 Conclusion 10 References 11 Introduction Christina Adams and David Ng recently completed their professional accounting qualifications, registered as tax agents and obtained all the necessary individual licenses as well as professional registrations required to operate as individuals. To start a new business, it is crucial to choose an appropriate business structure and facilitate the efficient operation and management (Pendieton amp; Vickery, 2005). Through the comparison of the different business structures, Christina and David will choose the partnership as the form of business entity to commerce their new†¦show more content†¦But each partner takes on unlimited liability for the businesss debts and there is also the risk of dysfunctional disagreements among the partners (Pendieton amp; Vickery, 2005). Company With the company option, it is a form of business organization and separate entity from its directors and members. One of the advantages is the ownership flexibility, shareholders being able to come and go without unduly affecting the business. At the same time, the limited liability of shareholders leads to the transference of the ownership rights for shareholders (Pendieton amp; Vickery, 2005). Other advantages include that it is easy to raise capital through public share offerings and expand the business networks effectively due to legal structure (Birt et al., 2012). Nevertheless, it is expensive and time consuming to set up. Complying with Corporations Act and other legal requirements, different types of companies need to prepare the financial reports based on accounting standards as well as conduct the complicated operational procedure like shareholder meetings or cultural management. While company taxation rates may be lower than some individual tax rates, tax losses are not p assed through to the members because of its separate legal entity (Seidman, 1950). Therefore, the distinctive features of the partnership structure overweigh itsShow MoreRelatedBasic Accounting Concepts and Business Structures971 Words   |  4 PagesBasic Accounting Concepts and Business Structures Shannon Goshert ACC 537 July 25, 2010 Angela Rose Abstract Basic accounting concepts and business structures go hand-in-hand. Usually the business structure will determine the type of accounting concepts it will use. Generally accepted accounting principles (GAAP) are needed for effective accounting information. 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