1. Introduction to Accounting Preparing for a User’s Perspective
What are the common forms of business ownership structure in the United States and what are some advantages and disadvantages of each?
Debits and Credits Trainer
Partnerships
By Kevin C. Kimball, CPA
with support from
Free Jan. 2014
Available on the Google Play Store

3. Shared Decision-Making Authority
WE make the decisions.
Partner >= 2
And we are the 2.
And what WE say rules!
Who are the partners in this business?
Hey, I don’t agree!!
Partner 1
Partner 2

4. Easy Set-up
>=2

5. Stop!! You need a license to do business here.
Minimal Regulations
Stop!! You need a license to do business here.
Sales Taxes $
Excise Taxes $

6. employees = more taxes & regulations
Minimal Regulations
employees = more taxes & regulations
830 Punchbowl St.
< 1 hour

7. Click here for another example.
Minimal Regulations
Click here for another example.

8. SEC? No! No law requires me to report to them.
IRS? Yes! Tax law requires me to report to them.
Creditors? Yes! My contract requires me to report to them.
Turn in your financials!!
Turn in your financials!!
Turn in your financials!!
Elisse B. Walter SEC Chairman since 2012
Creditors & others with contracts
Internal Revenue Service

9. You report $50. I’ll report $50. We each get taxed ONCE!
Corporations
Single Taxation
Partnerships
Double taxation
You report $50. I’ll report $50. We each get taxed ONCE!
Corporate Tax Return
Net income before taxes
$100
NO “partnership” tax
Corporate taxes
(40)
Net income after Corp. taxes
$ 60
Individual’s Tax Returns
Individual Tax Returns P P2
Diff
Dividend income
$ 60
Net income before taxes
$ 50
$ 50
(20)
Individual taxes
(12)
Individual taxes
(20)
Net income after Indiv. taxes
$ 48
Net income after Indiv. taxes
$ 30
$ 30
$12

10. Capital Distributions $50
Single Taxation
Are NOT taxed
Capital Distributions $50
Assets = Liabilities + Equity

11. High Access to Expertise
We’re all partners.
We can all make decisions.

12. High Access to Expertise

13. High Access to Expertise
I’m the managing partner.
I’m the sales partner.
I’m the client service partner.
I have a blister. I vote that we go home.

14. Limited Access to Capital
Lucky my 5,000 partners have some extra capital.
$$$$$$
$$$$$$
Partnership

15. Unlimited Legal Liability
Now that’s better.
Oooops! He blew it.
You owe me!!!
Lawsuit against ALL your assets and your partners’.

16. Potentially Unlimited Life
That’s OK, we’ll just get a new partner.
I’m leaving.
I’m terminating our partnership.
Partnership ends when

17. Difficult Transfer of Ownership
CAN with vote
Join partnership.
CAN
Take over partnership’s assets and liabilities.
CAN’T
Take our partnership.

18. Introduction to Accounting Preparing for a User’s Perspective
What are the common forms of business ownership structure in the United States and what are some advantages and disadvantages of each?
Debits and Credits Trainer
Partnerships
By Kevin C. Kimball, CPA
with support from
Free Jan. 2014
Available on the Google Play Store