Banal, Darwin L.

BT501A

October 3, 2013 Accounting Principle

Research Article about Partnership 1. A type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for its debts; other individuals called limited partners may invest but not be directly involved in management and are liable only to the extent of their investments. Unlike a Limited Liability Company or a corporation, in a partnership each partner shares equal responsibility for the company's profits and losses, and its debts and liabilities. The partnership itself does not pay income taxes, but each partner has to report their share of business profits or losses on their individual. Estimated tax payments are also necessary for each of the partners for the year in progress. Partnerships must file a return on Form 1065 showing income and deductions. Estimated tax payments are also required if they expect their income to be greater than $1,000. 2. More generally, a relationship of two or more entities conducting business for mutual benefit. PARTNERSHIP A partnership is an arrangement in which parties agree to cooperate to advance their mutual interests. Since humans are social beings, partnerships between individuals, businesses, interest based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace. In the most frequently associated instance of the term, a partnership is formed between one or more businesses in which partners (owners) co-labor to achieve and share profits and losses (see business partners). Partnerships exist within, and across, sectors. Nonprofit, religious, and political organizations may partner together to increase the likelihood of each achieving their mission and to amplify their reach. In what is usually called an alliance, governments may partner to achieve their national interests, sometimes against allied governments holding contrary interests, as occurred during World War II and the Cold War. In education, accrediting agencies increasingly evaluate schools by the level and quality of their partnerships with other schools and a variety of other entities across societal sectors. Some partnerships occur at personal levels, such as when two or more individuals agree to domicile together, while other partnerships are not only personal, but private, known only to the involved parties. Partnerships present the involved parties with special challenges that must be navigated unto agreement. Overarching goals, levels of give-and-take, areas of responsibility, lines of authority and succession, how success is evaluated and distributed, and often a variety of other factors must all be negotiated. Once agreement is reached, the partnership is typically enforceable by civil law, especially if well documented. Partners who wish to make their agreement affirmatively explicit and enforceable typically draw up Articles of Partnership. It is common for information about formally partnered entities to be made public, such as through a press release, a newspaper ad, or public records laws. While partnerships stand to amplify mutual interests and success, some are considered ethically problematic. When a politician, for example, partners with a corporation to advance the latter's interest in exchange for some benefit, a conflict of interest results; consequentially, the public good may suffer. While technically legal in some jurisdictions, such practice is broadly viewed negatively or as corruption.

Banal, Darwin L. BT501A

October 3, 2013 Accounting Principle

Governmentally recognized partnerships may enjoy special benefits in tax policies. Among developed countries, for example, business partnerships are often favored over corporations in taxation policy, since dividend taxes only occur on profits before they are distributed to the partners. However, depending on the partnership structure and the jurisdiction in which it operates, owners of a partnership may be exposed to greater personal liability than they would as shareholders of a corporation. In such countries, partnerships are often regulated via antitrust laws, so as to inhibit monopolistic practices and foster free market competition. Enforcement of the laws, however, varies considerably. Domestic partnerships recognized by governments typically enjoy tax benefits, as well

Philippines Partnership POSTED BY DAVE ON SUNDAY, NOVEMBER 15TH, 2009 Philippine Partnerships must be registered with the Securities and Exchange Commission (SEC). Steps and requirements to register a partnership with the SEC are: 1 Verification and reservation of the name of the partnership at the SEC. Once the name is accepted the SEC will issue a Name Verification Slip. 2 Articles of Partnership: The Articles of Partnership define the obligations, responsibilities and roles of each partner and how the profits and losses will be shared and states who the general and limited partners are. Unless otherwise stated a general partner may act on behalf of the partnership without any limitations. By law a limited partner is not allowed to participate actively in the management of the partnership or control of the business operations. 3 - Affidavit of a general partner undertaking to change partnership name (not required if Articles of Partnership has provision on this commitment) + Additional requirements: - Endorsement/clearance from other government agencies, if applicable For partnership with foreign partners: SEC Form No. F-105 (Application to do Business under the Foreign Investments Act of 1991 R.A. 7042, as amended Foreign Investment Agent Application Form if foreign partner is not a resident of the Philippines. Bank certificate on the capital contribution of the partners For foreign partners who want to register their investments with the BSP: Proof of inward remittance or affidavit manifesting intention not to register investment with the Banko Sentral ng Pilipinas.

Banal, Darwin L. BT501A

October 3, 2013 Accounting Principle

4. File all the documents with the SEC, upon payment of the requisite filing fees. Notes: Partnership must be dissolved upon the death of one of its general partners. General partners are personally legally responsible for all the obligations of the partnership. Limited partners are personally legally responsible only up to the amount of their capital contribution to the Partnership. A partnership is taxed like a corporation. Partnerships are subject to the restrictions on foreign ownership in Foreign Negative List A & B Foreigners can not be a partner in a partnership which owns land. A corporation may not be a partner in a partnership. In the case of a limited partnership, the word Limited or Ltd must be added to the partnership name. Articles of Partnership of limited partnerships should be under oath only (Jurat) and not recognized before a notary public. Documents signed outside of the Philippines must be authenticated by the Philippines Embassy/Consulate where it was executed.