Pros and Cons of Partnership Ownership A business ownership where two or more people enter an voluntary agreement to become co-owners of the company, and have the right to partake in management of the business is called a Partnership ownership. A partnership, like every other ownership, comes with its fair share of advantages and disadvantages making them suitable for some and not for others. Pooling of Financial resources is one of the major advantage of this kind of ownership, where owners can combine their investments and form a stronger financial base for the business while still having a relatively hassle free formation unlike a corporation. Another advantage such an ownership has over a corporation is in taxation, where the earnings are only taxed when they become a partner's personal income. A partnership can be formed by two individuals who have different skills, and are able to complement each other. For example, two individuals, one with a business management background and other with accounting, form a business partnership. In this scenario, they are able to complement each other well, where one person can take administer the accounting and finances, while the other deals more with management of business. This helps easing the burden on both the owners, if they had formed their own sole proprietorship business. Disadvantages also exist with a Partnership, such as the liability of a partner for not only his mistakes but also for those of the other partners, and this puts not only the business assets at risk, but also the personal assets. Disagreements are part of everyday human life, and they also have a place in business partnership, which leads to complicated decision making until the disagreements and disputes have been resolved. Withdrawal from a partnership is always a difficult task, since the withdrawing partner is still liable for the debts at the time of the withdrawal. When a successful withdrawal does occurs, it complicates things among other partners, and leads to the uncertainty about the future of the partnership.
Small Business Funding Options When opening any kind of business the most important requirement is having the initial capital to get the ball rolling. Small businesses do not require as much capital as corporations or any bigger industries, so finding the capital is relatively easier. Most small businesses start up with funds from the personal resources of the owners. Personal resources means capital from friends, family, credit cards etc. Commercial Loans are another form of funding resources which provide a small businesses with startup capital. Banks and other private lenders do not grant loans to people without good and detailed paperwork, and a share of startup capital from the owner, since most new businesses do not a track record at all. The U.S. Small Business Administration helps borrowers by partially guaranteeing the loans, so lenders would feel lesser risk in lending the money. Another way small businesses gain startup capital is through Angel Investors who invest in promising businesses for only one reason, which is to make profit for themselves. Finally, we have the Venture Capital Firms which help fund high potential businesses in exchange for a share in the ownership of the business.
Managerial Accounting advantages to Managers with Product Costing, Incremental Analysis, and Budgeting Managerial accounting is the branch of accounting which creates reports and statements to help the management make decisions regarding budgets, product costing and incremental analysis. Managerial accounting reports provide accurate measure of costs that a company incurs in order to produce their goods and services. These costs include labor, equipment used, utilities, materials etc. Managers use this information to set the price of the products and services they provide, so that the company can have a profitable turn over and improve efficiency in areas…