tailieunhanh - Accounting For Dummies 4th Edition_8

Tham khảo tài liệu 'accounting for dummies 4th edition_8', tài chính - ngân hàng, kế toán - kiểm toán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 176 Part III Accounting in Managing a Business Invested capital is only one of three factors that generally play into profit allocation in partnerships and LLCs Treasure Owners may be rewarded according to how much of the treasure invested capital they contributed. So if Jane invested twice as much as Joe did her cut of the profit may be twice as much as Joe s. Time Owners who invest more time in the business may receive more of the profit. Some partners or owners for example may generate more billable hours to clients than others and the profit-sharing plan reflects this disparity. Some partners or owners may work only part-time so the profit-sharing plan takes this factor into account. Talent Regardless of capital and time some partners bring more to the business than others. Maybe they have better business contacts or they re better rainmakers they have a knack for making deals happen or they re celebrities whose names alone are worth a special share of the profit. Whatever it is that they do for the business they contribute much more to the business s success than their capital or time suggests. A partnership needs to maintain a separate capital ownership account for each partner. The total profit of the entity is allocated into these capital accounts as spelled out in the partnership agreement. The agreement also specifies how much money each partner can withdraw from his capital account. For example partners may be limited to withdrawing no more than 80 percent of their anticipated share of profit for the coming year or they may be allowed to withdraw only a certain amount until they ve built up their capital accounts. Going It Afone Sole Proprietorships A sole proprietorship is basically the business arm of an individual who has decided not to carry on his or her business activity as a separate legal entity as a corporation partnership or limited liability company . This is the default when you don t establish a legal entity. This kind of business is not a .