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2: Types of Partnerships
General Partnerships
All partners have unlimited liability.
Creditors can go after the personal assets of any or all of the partners.
Limited Partnerships
Have at least one general partner and one or more limited partners.
General partner is personally liable for the partnership’s obligations and has management responsibility.
Limited partners are liable only to the extent of their capital contribution but do not have any management authority.
Typically use the equity method to account for their investments.
3: What are the procedures for forming a partnership in general partnership and LLP ?
Step one : choose a name
6: by admission there is additional capital and business expertise and that useful for economy
7: by admission there is investments and profit and that useful for economy
partnership : is association of two or more persons to carry on as a co owners of business for profit
7: Discuss briefly, the main differences among accounting and law perspectives with regard to issues with short contrast between
Egypt and USA ?
In Egypt In America
Liability partnership Unlimited liability partnership Limited liability partnership (may be limited or
law point of view unlimited according to contract).
The accounting: does not matter (close partners' loan in his capital account).
9: Income-sharing Plans for LLP (if no explicit plan for sharing earnings, the law requires equal division)
خطط توزيع المكسب
1. Equally, or in some other ratio.
2. In the ratio of the partners' capital account balances on a specific date, or in the ratio of average capital account balances during
the year.
3. Allowing interest on partners' capital account balances and dividing the remaining net income or loss in a specified ratio.
4. Allowing salaries to partners and dividing the resultant net income or loss in a stated ratio.
5. Bonus to managing partner based on income.
6. Allowing salaries and interest on capital account balances, and dividing the remaining net income or loss in a stated ratio.
10: What is the debate between accountants about admission new partner to the LLp?
There are two opinion of entry of new partner
1: revaluation of the company assets and determine the share of new partner ( more problems in this opinion )
2: registration partner’s share paid without regard to anything ( most accountant prefer this opinion )
11: What is the difference between the death of partner and the retirement of the partner ?
Death Of Partner
1: LLP contract often provide for life insurance policies on each others lives for settlement of estate of a decreased partners
Retirement of partner
1: the partner can sell his equity ( capital ) in the partnership to an existing partner or to new partner
2: if the amount received by a retiring partner differs from book value of his equity , the difference is recorded as