PARTNERSHIPS The work is fulfilled student gr. IK-101 Kateryna Shvorak. - презентация

1 PARTNERSHIPS The work is fulfilled student gr. IK-101 Kateryna Shvorak

2 The salaried partners - наймані партнери The anti-trust laws - антимонопольні закони The shared concerns - загальні проблеми The high-calibre employees - висококваліфіковані співробітники The circumstances – обставини The debts – борги A favour – користь An arrangement – угода The equity partners – акціонерні партнери The Hanseatic League - Ганзейська ліга The Medieval times - Середньовічні часи NEW WORDS

3 A partnership is a formal arrangement in which two or more parties cooperate to manage and operate a business. Various partnership arrangements are possible in which all partners might share liabilities and profits equally or some partners may have limited liability. WHAT IS A 'PARTNERSHIP?

4 Partnerships were already in use in Medieval times in Europe and in the Middle East. In Europe, the partnerships contributed to the Commercial Revolution in the 13th century. In the 15th century the cities member of the Hanseatic League, would mutually streng then each other. This practice not only saved time and money; but also constituted a first step toward partnership. HISTORY

5 A partnership is organized to provide for proportional ownership of a company among the partners based on some type of formula or value of investment in the company. Partnerships pass along the profit (and losses) to its owners and offer tax advantages to the company. Each partner in the partnership pays taxes on the distributions based on their individual tax rate. HOW IT WORKS?

6 General and limited partners. Equity and salaried partners. The various levels of partners in the partnership TYPES OF PARTNERS

7 When a partnership is formed, one of the first acts of the partners should be to prepare and sign a partnership agreement. This agreement describes all the responsibilities of the partners, sets out each partner's distributive share in profits and losses, and answers all the "what if" questions about what happens in a number of typical situations. PARTNERSHIP AGREEMENTS

8 The partnership business doesn't pay any income tax; the partners pay the taxes of the business, based on their share of the profits for a specific year, as spelled out in the partnership agreement. TAXATION

9 More recently, additional forms of partnership have been recognized: limited liability partnership (LLP) limited liability limited partnership (LLLP) FORMS OF PARTNERSHIP

10 A limited partnership in the United Kingdom consists of: One or more people called general partners, who are liable for all debts and obligations of the firm; One of the firm beyond the amount contributed. Limited partners may not: Draw out or receive back any part of their contributions to the partnership; Take part in the management of the business or have power to bind the firm. UNITED KINGDOM LIMITED PARTNERSHIP

11 Under U.S. law a partnership is a business association of two or more individuals, through which partners share the profits and responsibility for the liabilities of their venture. The federal government of the United States does not have specific statutory law governing the establishment of partnerships. Although the federal government does not have specific statutory law for establishing partnerships, it has an extensive statutory and regulatory scheme for the taxation of partnerships. UNITED STATES PARTNERSHIPS

12 In Ukraine, the relevant law for regulating partnership is the law "on limited liability partnerships " The law defines the legal status of companies and the procedure for their creation, activity and termination, the rights and obligations of their participants. The number of participants in the partnership is not limited. The draft law provides for the regulation of corporate agreements, known as "shareholder agreements". PARTNERSHIPS IN UKRAINE

13 two heads (or more) are better than one your business is easy to establish and start-up costs are low more capital is available for the business high-calibre employees can be made partners there is opportunity for income splitting partners business affairs are private its easy to change your legal structure later if circumstances change. ADVANTAGES OF PARTNERSHIPS

14 the liability of the partners for the debts of the business is unlimited each partner is liable for their share of the partnership debts as well as being liable for all the debts there is a risk of disagreements and friction among partners and management each partner is an agent of the partnership and is liable for actions by other partners if partners join or leave, you will probably have to value all the partnership assets and this can be costly. DISADVANTAGES

15 In a partnership, two or more people share ownership of a single business. The partners should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be resolved or what steps will be taken to dissolve the partnership when needed. They also must decide up front how much time and capital each will contribute, etc. CONCLUSIONS

16 Partnerships are relatively easy to establish. More than one owner, the ability to raise funds may be increased. At the same time, partners are jointly and individually liable for the actions of the other partners. Another serious drawback of partnership is the threat of potential disagreements among partners over decision- making, which may cause management conflicts adversely affecting the business.