ECONOMICS
ENTREPRENEURS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Partnerships aren’t taxed as a separate business entity.
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All partners can leave their partnership business any time without notice.
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All above answers
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None of the above
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Detailed explanation-1: -Advantages of a partnership include that: two heads (or more) are better than one. your business is easy to establish and start-up costs are low. more capital is available for the business.
Detailed explanation-2: -Partnerships themselves are not taxed as entities; they pass through the taxes to the partners. This means that your revenues are taxed at your personal income tax rate. You avoid the double taxation that happens if you own a corporation, where the company pays tax and then you pay tax on your dividends.
Detailed explanation-3: -Corporations–being entities in their own right–are taxed, and the profits are passed to owners who are then also taxed on them. Partnerships avoid the double taxation issue. Additionally, in corporations and often in LLCs, losses are not passed through to the owners.
Detailed explanation-4: -A partnership firm is required to file a partnership firm income tax return under the Income Tax Act, 1961. Partnership firms are liable to pay income tax at the rate of 30% of total income. Besides, a partnership firm is liable to pay an income tax surcharge of 12% if the total income exceeds Rs.