Partnerships and limited companies
‘Corporation, [i.e. Company] n. An ingenious device for obtaining individual profit without individual responsibility.’
Ambrose Bierce, The Devil's Dictionary, p. 29.
After completing this chapter you should be able to:
- Explain the nature of partnerships and limited companies.
- Outline the distinctive accounting features of partnerships and limited companies.
- Demonstrate how to prepare the accounts of partnerships and limited companies.
- Understand the differences between listed and non-listed companies preparing accounts under IFRS for SMEs.
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- Sole proprietors, partnerships and limited companies are the main forms of business enterprise.
- A partnership is more than one person working together.
- Partnership accounts must share out the profit and equity between the partners.
- Sharing out profit, capital and current accounts are special partnership features.
- A limited company is based on the limited liability of the shareholders (i.e., they lose only their initial investment if things go wrong).
- A limited company's special features are taxation, dividends and equity employed split between share capital and reserves. ...
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