Question

1-1 Ann and Jack have been partners for several years. Their firm, A & J Tax Preparation, has been very successful, as the pair agree on most business-related questions. One disagreement, however, concerns the legal form of their business. Ann has tried for the past 2 years to get Jack to agree to incorporate. She believes that there is no downside to incorporating and sees only benefits. Jack strongly disagrees; he thinks that the business should remain a partnership forever. First, take Ann's side, and explain the positive side to incorporating the busi- ness. Next, take Jack's side, and state the advantages to remaining a partnership. Lastly, what information would you want if you were asked to make the decision for Ann and Jack?

Answer 1

PAGE NO. PAGE NO. DATETT DATE: Taking line of Partnership There are several bengits of being into Partnership by Ann & Jack such as z a) Regato destí. As partneriship is abueady establish and business sx cost are low b. Partnership film have greater borrowing co Pessiniseship buitiness affairs are private - d.) As There is limited external regulation e) It will be easy to change legal structur -Testes y descumstances is not a fawows.in

* Corporation Advantage Qu) limited liability. Shosholders of the company are not personally liable to pay for contractual obligationssa difts, negligence. The most money that a I sharwhaldous can lose is his investment in the corporation

يحجعفرط علممملها b.) Perpetual existence. The company is a the eye of law. This means owners of the company aut demise will have no effect or Areglible effect on Investors of the company. One e the great aderentage q a corporation is that its easy to transfer aineiship interests in a corporation. The board of director can authorize the issue of shares of stock in exchange for investors' Capital infution into the campan

U c) Soliberoptiletadship bankeupty. () It southwest és a sole proprietor and no longer able to meet its obligation company will have to consider as bankrupt - tu to soleproprietor will have to apply for bankrupt cowet where it is registered o The purpose is to get an overwiew of assets and to twen these into money for distribution luto up unpaid debt and credi ivo) The debt will not be remove after the bankeuptry proceedings have been concluded A duhet Owners of the southwest are personally liable and responsible infull for all debt which has acorned.

.) If still southwest debt problems are محاموللمصمم علطعه بمقيم the estate has been concluded Owners can apply for a dibt managment plan.

ASHOLA PAGE NO. DATE: #) Paestuseship 50-60 & As the Partnership liabilities are unlimited the best with Partnership is linseparable focan ib suvels. Do libed Partners in a limited partiship is personally liable for the entire amount of any business relatest an 50-50 pautarship firm the partner o are equally liable to pay $60,000 and Tawestors makey $25600

DATE ) Componcita bankrupty) There are are two types of bankruptcy a company might file So de Chanty-t a liquidation - type bankeuestes (84) b) cheptes - 1 vuossgassizcitia had Chapter 4 bankruptcy A chapter 4 bankruptcy is also know was Iliquidation because under this section company ceases to operate its business and a trustee is appointed to sell the company's assets. The tenistre than uses Touch money to pay off the debt. As sauthwest is bankrupt Company I will appoint a trustee to sell off da fall aslits and money will be use to pay to be use to pau 1 of the liability 115 this B) cheiptis- 11. A chapter-1 is also known as organizati Lion Under this company try to bring its business operation on track. At the sout of the prosess the owners of the company