Business entity Essay Example | Topics and Well Written Essays - 250 words

Business entity - Essay ExampleThe limited compact is not subject to federal income tax.The limited confederation allows the acceptance of two partners who contribute a different fund amount and a third partner who only contributes his or her services in situation of capital, considering each of the owners has a spouse and adult children. Normally, the limited partners contribution to the partnership is lower than the full general partners contributions. The limited partners are prohibited from fighting(a) in the management decisions of the partnership. Only general partners are allowed to make management decisions (Clifford, 2008).In terms of limited partnerships liability, the creditors can get the general partners family assets to pay for the liabilities of the limited partnership. On the other hand, the creditors cannot get the limited partners family assets to pay for the liabilities of the limited partnerships liabilities (Clifford, 2008).The best form of business for a s mall business is limited partnership. For a limited partnership, a small business can easily grow to produce a big business when the most opportune moment comes. As the business profits continue, all the limited partnerships partners can amplify the store size, sell more product types, or up a new branch in another locality (Clifford, 2008).Analyzing the above information, many persons need to form a limited partnership. The limited partnership is tax exempt. The creditors can only get the general partners assets. Only the general partners can make partnership decisions. Convincingly, the limited partnership works best in the above business