Pros and Cons of Partnership as a Form of Ownership Essay Essay Example

Pros and Cons of Partnership as a Form of Ownership Essay Essay Example Pros and Cons of Partnership as a Form of Ownership Essay Essay Pros and Cons of Partnership as a Form of Ownership Essay Essay Essay Topic: Pros and Cons Q. 1 Identify the pros and cons of the partnership as a signifier of ownership? A partnership is formed when two or more people engage in a concern activity and portion investing. net income and loss. Just like any other signifier of ownership. it has its advantages and disadvantages. Following we discuss some of the pros and cons of a partnership. Professionals of the Partnership ( 1 ) Ease of Formation: Partnership is relatively simple to organize. All you need to organize a partnership is an understanding. A verbal understanding is adequate to get down a partnership nevertheless it is much recommended that partnership be formed based on a written legal partnership understanding. ( 2 ) Support: Partnerships by and large have a low startup cost. With two or more people puting capital in the company. the concern will hold a much stronger fiscal land. Two or more people can besides hold better entree to outside financess needed to run the concern ( 3 ) Divided Duty: In a partnership duties of running a concern are shared by the proprietors. Shared responsibilities ease the work burden on persons and can besides increase productiveness by dividing duties in a manner that persons can utilize their particular accomplishments to maximise the end product. ( 4 ) Support: Owning and running a concern can be really demanding. disputing and nerve-racking. Having a concern spouse can give you a small peace of head because a spouse can supply moral support when needed. ( 5 ) Tax: The income profit/loss in a partnership flows through the concern to single spouses for revenue enhancement. In other words the spouses are taxed merely on the BASIC of personal income i-e how much loss or net income a spouse endured. Cons of Partnership: ( 1 ) Liability: In a partnership both spouses have un-limited liability ( non in LP and LLP ) . Both spouses are responsible for non merely their ain actions but besides the actions of their spouses. So. if your spouse fails to pay a debt. you personally are responsible for paying that debt and frailty versa. If person sues the partnership and the concern doesn’t have adequate money to cover the disbursals than the spouses personal assets will be at interest. ( 2 ) Conflicts and Disagreements: Partnerships are for the long term and over the class of clip struggles arise and disagreement happens. Whether these are personal or direction manner struggles. They can adversely impact the concern. When general spouses don’t agree it can detain the determination devising clip of the company and a bad struggle is adequate to fade out a partnership. ( 3 ) Dependence on Spouses: The success of any partnership depends to a great extent on part from all spouses. If a spouse withdraws the concern will be crippled. if a spouse dies the partnership can decease with him. Furthermore you can’t do any concern determination on your ain you’re dependant on your spouse. ( 4 ) Trouble Withdrawing: It is non that easy to acquire out of a partnership. Whoever needs to retreat will be personally apt for any pecuniary duties due at the clip of withdrawl. Q. 2 Discuss support options for little concern? In order to run a concern you need capital. Geting the money together to get down a new concern is the top precedence of any enterpriser. There are several ways to finance a little concern. Following are some options for financing a little concern. ( 1 ) Personal Resources: Using your ain assets is the most common signifier of little concern funding. You can utilize money from your salvaging. inquire household or friends for capital or utilize a recognition card. ( 2 ) Loans: In order to startup a new concern. enterpriser borrows money from the Bankss. The Bankss charge an involvement rate on the money Lent. The concern proprietor must pay the original money borrowed plus the accrued involvement over the life of the loan. In today’s economic system it is non easy to procure a commercial loan with the bank. A better and easier manner for a new concern to acquire a bank loan is with loan warrant from the SBA. ( 3 ) Angels Investors: Another manner to fund a little concern is by private investors. Angel Investors are persons who have a batch of money and are looking to put a big sum into a profitable concern for fiscal addition and net incomes. ( 4 ) Venture Capital: The companies who fund promising and high potency companies in exchange for ownership portions are known as venture capital houses. Venture capital is the money provided by venture capital houses to startup concerns that are perceived to hold a long term growing potency. It has a high hazard for investor but besides has possible for above mean net income returns. 3. Determine and discourse how managerial accounting can assist directors with merchandise costing. incremental analysis and budgeting? Managerial accounting provides accounting information needed by directors inside an organisation to run its twenty-four hours to twenty-four hours operations. It provides directors with fiscal information’s needed to do sound concern determinations. Managerial accounting information includes budgeting. merchandise costing. public presentation studies. discrepancy analysis and fiscal ratios. Following we look at three managerial responsibilities that rely on information received from managerial accounting: ( 1 ) Merchandise Costing: Merchandise costing is the procedure of accurately find the cost of a individual merchandise. by analysing all the disbursals that accrued from the beginning ( natural stuff ) to the terminal ( sale ) . In traditional costing method indirect costs are applied to merchandises. based on an overhead rate that is predetermined. The traditional costing system is easier and much simpler but fails to add the cost of non-manufacturing goods that are associated with the production of that point. ( 2 ) Activity Based Costing: Activity Based Costing is a new method in bing. It’s much more complicated that the traditional costing system. ABC gives a much more accurate merchandise cost. Under activity based accounting associated with production of an point is determined and priced. This priced activity is than assigned to every merchandise that requires the monetary values activity for production. Managerial accounting provides directors with the fiscal information needed to find the cost of a manufactured merchandise. ( 3 ) Incremental Analysis: Incremental Analysis is a determination doing tool. It is used for the analysis of fiscal information needed to do an informed determination. In incremental analysis two different options are weighed out in footings of cost/profit and the impact of the result of this analysis will hold on a peculiar determination. It fundamentally points our related cost and gross of each option and the impact this option will hold on future income. After utilizing incremental analysis and taking one option over the other. The cost alteration that occurs due to taking the option is called incremental cost. Managerial accounting provides us with the Numberss needed to compare two different options. pick the right one and analyse the difference in cost. Budgeting: It helps directors program and control costs and grosss. Budgeting is a tool for directors to find how much money demands to be spent in order to bring forth a certain degree of income. Budgeting in simple footings can be called prediction ; in budgeting we prepare a really elaborate statement of fiscal consequences that are likely to go on in a clip period to come. Companies use budget to be after for a future period based on fiscal statements. Managerial accounting provides directors with the fiscal statement for budgeting. Q4. Discuss the basic constituents of the selling procedure utilizing the merchandise or service of your pick as an illustration? Marketing scheme can be described as an activity to place a merchandise. attract clients while advancing the involvement of stakeholders in a concern. Selling makes it possible to pass on the value of a merchandise or service to consumers. Following the basic constituents of marketing procedure is explained briefly utilizing unreal jewellery as a merchandise. ( 1 ) Merchandise Scheme: Methodologies. tools and engineering used by a concern to distinguish and separate its merchandise from its rivals. is called merchandise scheme. In footings of unreal jewellery my scheme would be to depict my merchandise in full item including where it was made. who it was designed by and what metals were used in its formation. I would besides put my merchandise apart by taking appealing packaging and I would endorse the quality of my merchandise by giving warrants. And above all I would supply model merchandise designs and first-class client service. ( 2 ) Pricing Scheme: Pricing Strategy is really of import in selling because it generates a turnover for the company and it’s besides of import because it affects other constituents of selling as good. In footings of unreal jewellery foremost I would make a thorough research on competition monetary values. than I would cipher my concluding cost and choose a pricing aim. I would compare my sale monetary value with that of my rivals. and do certain that my monetary value is lower than the rivals and value of my merchandise is higher than the competition. Initially. I would maintain my profitableness low and will seek to construct clientele base by supplying unbeatable monetary values. ( 3 ) Distribution Scheme: Distribution plays a really of import function in marketing scheme. It involves how good the concluding merchandise is delivered to the consumer. The merchandise must be delivered to the terminal user in the right measure. at the right day of the month and clip. In footings of unreal jewellery most of my gross revenues will be distributed at shows and festivals organized by different entities and a major portion of my gross revenues is besides traveling to be web based. I will reach different transporting companies to happen out the best messenger in footings of monetary value and value. And ship my jewellery through the best medium. at minimal sum of tie. ( 4 ) Promotion Scheme: Promotion Strategy is besides critical portion of selling. A publicity scheme includes all the ways used by companies to supply information about their merchandise in such a manner that it would finally increase the company’s sale. In footings of unreal jewellery I would offer some kind of voucher and publicize my price reduction. Offer free transportation ( when possible ) . keep client dealingss and send out promotional information to bing clients. Q. 5 Discuss the function of societal duty and engineering in the selling map. Social Responsibility in Selling: Being socially responsible for an organisation means that it cares and shows concerns about the people and environment in which they conduct concern. Selling can be described as publicity. merchandising and distribution of a merchandise. Social duties in selling would first of all include truth stating about their merchandise. all the information about the merchandise should be correct and up to day of the month. Companies should be concerned about their environment and take stairss to do a cleaner. Companies should besides demo support for societal causes in selling. Company should market their merchandise in a manner that it doesn’t offend any group of people. Technology in Selling: The technological roar in the past old ages had decidedly revolutionized selling. The cyberspace has created legion selling chances for concerns. Now yearss there are legion selling houses that work entirely on the cyberspace. At first wireless changed selling. than Television and now it’s the age of manus held devices and cyberspace. Sellers now yearss know that changeless technological progresss require development in the selling procedure. With technological progresss it’s much simpler and quicker to acquire client feedback. It is much simpler to present the merchandise to the client and to make market research and keep your trade name repute. Technology had had a great impact on selling.