Difference between partnership and voluntary association
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Voluntary Association Law and Legal Definition
Partnership , voluntary association of two or more persons for the purpose of managing a business enterprise and sharing its profits or losses. In the usual partnership each general partner has full power to act for the firm in carrying on its business; thus, partners are at once proprietors and also agents of their copartners.
If a partner has paid or been required to pay creditors of the firm from personal assets, other partners may be expected to contribute on an equal or some other agreed-upon basis. If copartners have become insolvent, however, this remedy for unlimited personal liability may be inadequate. Unlimited personal liability has been one factor restricting the partnership form of business to small enterprises. Unlike the corporation , the partnership is regarded merely as an aggregation of persons doing business under a common name and not as a legal entity separate and apart from its shareholders.
The implication of this is that the earnings of the partnership will be taxed only as personal earnings of the partners. Although corporations are usually organized to have perpetual existence, partnerships may be dissolved at any time upon the withdrawal or death of a partner. Dissolution may be avoided by issuing transferable shares, but this device is usually not feasible except by a large organization in which, as in the case of a corporation, operating control can be centralized in a board of managers.
In the United States the demand for a hybrid of corporate and partnership structure led to the creation of the limited-liability company LLC , a form of business organization that restricts the liabilities of individuals as in a corporation while also simplifying the taxation of income by passing profits or losses onto individuals as in a partnership. First instituted in Wyoming in , LLCs had been adopted in all 50 states by See also limited liability.
Info Print Cite. Submit Feedback. Thank you for your feedback. Partnership business. See Article History. Read More on This Topic. Although discussions of the new governance often highlight NPM, public-sector reform is a continuous process. Typically, managerial reforms…. Learn More in these related Britannica articles: governance: Networks, partnerships, and inclusion. Typically, managerial reforms gave way to a second wave of reform focusing on institutional arrangements networks and partnerships and administrative values public service and social inclusion.
The distinguishing features of the partnership are the personal and unrestricted liability of each partner for the debts and obligations of the firm whether he assented to their being incurred or not and the right of each partner to participate in the management of…. All partners are agents for each….
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Overview of Businesses and Partnerships
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Partnership , voluntary association of two or more persons for the purpose of managing a business enterprise and sharing its profits or losses. In the usual partnership each general partner has full power to act for the firm in carrying on its business; thus, partners are at once proprietors and also agents of their copartners. If a partner has paid or been required to pay creditors of the firm from personal assets, other partners may be expected to contribute on an equal or some other agreed-upon basis. If copartners have become insolvent, however, this remedy for unlimited personal liability may be inadequate.
A voluntary group or union also sometimes called a voluntary organization , common-interest association ,  : association , or society is a group of individuals who enter into an agreement, usually as volunteers , to form a body or organization to accomplish a purpose. Membership is not necessarily voluntary: in order for particular associations to function correctly they might need to be mandatory or at least strongly encouraged, as is common with many teachers unions in the US. Because of this, some people use the term common-interest association to describe groups which form out of a common interest, although this term is not widely used or understood. Voluntary associations may be incorporated or unincorporated; for example, in the US, unions gained additional powers by incorporating.
The special features of a joint stock company can be well understood if we compare the features of a company form of organization with that of a partnership firm. The important points of distinction between the company and partnership are given below:. Any voluntary association of persons registered as a company and formed for the purpose of any common object is called a company.
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19 Differences between a Company and Partnership
A voluntary association or union  is a group of individuals who voluntarily enter into an agreement to form a body or organization to work together for a purpose. In most of the cases no formalities are necessary to start an association. But in some jurisdictions , there is a minimum for the number of persons starting an association, in others the association must register with the police or other official body to inform the public of the association's existence. This is not necessarily a tool of political control but much more a way of protecting the economy from fraud. In most countries, an unincorporated association does not have separate legal personality , and nor do members of the association usually enjoy limited liability. However, in some countries they are treated as having separate legal personality for tax purposes. Associations that are organized for profit or financial gain are usually called partnerships.