Introduction to Partnerships (Intermediate Accounting 1) PDF
Document Details
Assiut University
Dr. Hesham Nagdy
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Summary
This document discusses different types of partnerships, including general and limited partnerships, along with joint ventures. It also covers the key features of capital companies such as joint-stock companies and limited liability companies. The document also details elements of partnership agreements and the requirements for partnership contracts.
Full Transcript
Chapter one Introduction to Partnerships Intermediate accounting 1 Dr- Hesham Nagdy Lecturer of accounting at Assiut university Director of EP at faculty of financial and administrative sciences at ANU Ph.D. in Accounting, China Learning Objectives...
Chapter one Introduction to Partnerships Intermediate accounting 1 Dr- Hesham Nagdy Lecturer of accounting at Assiut university Director of EP at faculty of financial and administrative sciences at ANU Ph.D. in Accounting, China Learning Objectives: 1. Differentiate Between partnerships and capital companies 2. Identify the Essential Elements of a Partnership Agreement 3. Recognize the Key characteristics of Partnerships: 4. Identify the requirements for partnership contracts 2 1- partnerships ❑ an association of two or more persons (partners) to carry on a business as co-owners for profit ❑ personal relationships and trust play a significant role in their formation (a) General Partnerships: All partners are general partners (b) Limited Partnerships: includes two types of partners: one or more general partners + one or more limited partners 3 1- partnerships (a) General Partnerships: all partners are general partners (b) Limited Partnerships: one ore more general partners + one ore more limited partners General partners: is a partner who actively manages the business and has unlimited personal liability for the partnership’s debts. A limited partner is a partner who contributes capital to the business but has no management authority and limited liability, only up to the amount they invested. (c) Joint Ventures: a company without a capital or a name, formed for one or more specific commercial purposes 4 2- Capital Companies ❑ prioritize financial considerations over personal relationships ❑ The types of capital companies (a) Joint-Stock Companies: The capital is divided into equal shares, referred to as "stocks." (from 5 : 1000 EGP) The liability of each shareholder is limited to the value of the shares they own (b) Partnership Limited by Shares: Similar to limited partnerships, but in this case, the shares of limited partners take the form of stocks, as in joint-stock companies 5 Capital Companies (a) Joint-Stock Companies (Corporation) (b) Partnership Limited by Shares (c) Limited Liability Companies (LLC) the number of partners cannot exceed fifty each partner's liability is limited to their share in the capital 6 3- Partnership Agreement Elements of a Partnership Agreement ❑ General Elements: Mutual Consent - Subject Matter (lawful and possible to achieve) - Lawful Purpose - Legal Capacity ❑ Specific Elements of a Partnership Agreement Minimum of Two Partners Capital Contribution Intention to Share Profits and Losses ❑ Formal Requirements : partnership contract must be written (except for joint ventures) 6 4- Key Features of Partnerships ❑ Easy to Form - Financial and Technical Strength - Shares Cannot Be Traded - Limited Lifespan - Partner Liability) 5- Contracts for Partnerships ❑ Should include Partner Details- Formation Details- Capital Contributions - Valuation of Non-Cash Contributions - Duties and Rights - Partner Withdrawals -Profit Distribution plan - Dispute Resolution حل النزاعات- Changes in Partnership 7
