Sole Traderships Partererships And Limited Liability Companies Accounting Essay

Differences and SIMILARITIES while running concern as a exclusive bargainer, as a partnership and as a private limited liability company.

Well there are some differences and similarities while running concern in different froths. In the exclusive bargainer ship merely one individual works so he is the proprietor, employee, financer, determination taker of all affairs. While in partnership two or more than two individuals ain concern. So before take any determination the spouses should discourse about good and bad things so determination will be taken. In PPL portion holders are the proprietors and they elect the managers among them to run a concern. So if any of import determination should be taken they arrange a board meeting and in a meeting they ask for the ballots of stockholders and so determination will be taken on the footing of the consequence of the ballots.

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In the exclusive bargainer ship concern one individual own the concern so liability is limitless because merely the proprietor take money in the concern so he will have the net income but in the instance of loss or heavy loss the proprietor has to sell his ain private belongings to pay debts. So it is the large hazard factor. While in the partnership the duty is same as the exclusive bargainer but it will be divided all the spouses. So if there is a heavy loss spouses private belongingss can be in danger. But in the PPL this point of duty is wholly different from above two. Liability is limited. In PPL stockholder ‘s hazard is merely by the sum he invests in the company. If company will do a loss he will lose his money he invest nil more than that. I t is the good side of PLLC.

In exclusive bargainer ship determination doing procedure is speedy because proprietor has to take all determinations so it does take less clip comparison to partnership and PLLC. While in partnership determination devising is speedy but non speedy as exclusive bargainer ship. Because two or more spouses has to make up one’s mind so it does take some clip or erstwhile dissension does consequence. In PLLC determination doing procedure is slowest comparison to above two. Because managers have to inquire all portion holders before they take any determinations. So disagreement does consequence in hold of determination devising procedure.

In exclusive bargainer ship there is merely one individual who brings capital in it. So finance could be less comparison to other two concerns. Where in partnership two or more spouses bring finance in concern. So it could be non as much but as adequate to spread out the concern. While in PPL the sum of the finance might be relatively higher as there are so many stockholders in who bring their money in a concern.

2.2 ) Discuss the virtues and demerits of partnership, PLLC and exclusive bargainer ship concern.

Advantages of exclusive bargainer ship concern are it is the easiest froth to command, to the lowest degree expensive to run agencies need s less money than Partnership and PLLC. The proprietor will have the net income heterosexual. Tax benefits are the chief virtue. Alternatively of demoing the concern income if the proprietor will demo that income as a personal income he will hold to pay less revenue enhancement instead than concern income. Here it is easy to reassign ownership when proprietor wants. Disadvantages are it does hold unlimited liability to run proprietary concern. In the instance of loss proprietor has to sell his ain belongings to pay debt. It is really hard to raise fund for the proprietor from his nest eggs if he wants to spread out the concern. Life of the exclusive bargainer ship is limited if the proprietor dies the concern comes to an terminal.

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Merits of Partnership are its easy to set up and run with more finance because in the concern all spouses will convey their finance. Means it is easier to raise fund here. Due to more spouses concern will acquire full benefit of the spouses ain accomplishments, ability to run concern, scheme, acquire new thoughts to spread out concern. Demerits are once more limitless liability spouses have risk on their belongings in the instance of heavy loss. Conflicts may happen sometime while determination devising because some might be disagree. Confidentiality may be the demerits because due to some spouses some of import information might be leaked.

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Merits of PPLC are it is good for stockholders because they are apt for the sum they invest. Means the stockholders have limited liability here. Transportation of ownership is easy by merely by selling portions. It ‘s easy to raise fund for concern by publishing more portions. Demerits are it is non every bit easy as the above concern froths to set up the concern. Cost of running concern is higher. Privacy ca n’t be maintained because company has to inform all stockholders. Company has to pay revenue enhancement as ‘business is separate entity ‘ . It may be delay in determination devising.

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CASE 3: Audited account

3.1 ) Discuss in item the assignment and remotion of external hearers.

Basically company has 3 commissions. There are strategic planning, audit, wage and rating. The chief aims of the Audit commission are to enroll or replace the external hearer, to do communicating between internal hearer and external hearer, to oversee company ‘s finance statements and to print it.

Normally Audit Committee recruits external hearer after acquiring conformation from stockholders at company ‘s AGM. The audit commission is responsible for choice, and enlisting of the external hearers on the footing of appraisal. Once hearer is recommended board will acquire verification from BOD and senior executives. After enrolling external hearer a company must revolve their external hearer after every 5 old ages.

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Removal of external hearers is bit similar to the choice procedure. Audit commission prepares the study of the duties and functions in the company and which stairss to be taken by the external hearers to forestall jobs occur in the concern related to fiscal studies. And commission has to subject study to the board of managers. If there will be any dissension or struggle occurs or if board of managers will non be satisfy with external hearers they will inquire commission to take that external hearer and replace another hearer. And this procedure will publish a study as a study of portion holders in one-year study.

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3.2 )

3.3 ) discourse the cardinal differences between internal audit and external audit.

As both internal & A ; external audits are of import for the administration. There are some differences between internal and external audit systems.

Internal audit usually shows whether the operation, company comply as per scrutinizing criterions or non. Where external audit reappraisals that at the terminal of each twelvemonth company ‘s fiscal studies are complete or non. External audit is straight or indirectly concerned with internal audit system. ex: -an external hearer may utilize the information which is being used by internal hearer. While internal audit is saperate procedure non connected with external audit at all. Internal audit procedure is concern with the internal twenty-four hours to twenty-four hours undertakings while external audit concerned with internal audit procedure on annual footing to analyze company ‘s fiscal statements.

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4.1 ) Discuss unity, objectiveness, professional competency and due attention, confidentiality and professional behavior sing the codification of moralss for professional comptrollers.


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