• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Accounting Assignment - Partnerships, Limited Liabilty Companies and share capital

Extracts from this document...

Introduction

Accounting 2 assignment by Carly Faulkner. BSMA1 ________________ The final accounts in relation to Sole traders and Partnerships. In the final accounts of a sole trader the capital is brought in by one individual. This person is entitled to all the profits. This also means that if the individual runs into difficulty and cannot meet his/her debt repayments the creditor can take the individual?s personal assets e.g. car, house, etc. In sole tradership the balance sheet will show only one capital account. Whereas in a partnership, the capital is brought in by more than one person and less than twenty, the profit is shared out in whatever proportion that is stipulated by their, ?Partnership Agreement? which is explained below. If there are three partners in the company then there will be three separate capital accounts, one for each partner. The structure of a partnership agreement. A partnership is an entity where ownership is divided between at least two people. Partnerships have unlimited liability. A partnership agreement is an agreement of the rights and liabilities of the partners of a company this will lay out ...read more.

Middle

The shareholders liability will be limited to the original price the person pays for the share, e.g. If an individual pays one euro for their share the maximum that shareholder can lose is one euro. The share capital has to stay within the company. Shareholders may not withdraw his share capital until the company is wound up. The Names and address of all directors and their shareholdings have to be registered. The Memorandum and Articles of Association must also be registered. Continuous Obligations All directors are accountable for anything that happens in the company. The directors are required to send in an Annual Return this will state any changes in particulars connected with the directors, the registered office and the Memorandum and Articles. It details any shares or mortgages taken out by the company. In other words it?s a file of detailed information about what is going on in the company throughout the year financially. It is the director?s duty to make sure all information is accurate. ...read more.

Conclusion

Equity shareholders are entitled to all the profits and losses of the company. Preference shares Preference shareholders do not have a share of the ownership of the business. They are not entitled to profits or assets in the event of the company being wound up. They are entitled to fixed dividends out of the profit of the company. If an individual has eight per cent preference share then at the end of the year that individual will make eight cent for every one euro worth of shares held. Share nominal value This is where a company issues shares there has to be a nominal value. This is designed when the promoters are drafting the Memorandum and Articles. Nominal value shares value at one euro but nominal values of fifty, twenty five, ten and five cents can be found. Whatever value chosen has little importance. If five thousand euro share capital has to be raised then the directors would have to issue five thousand equity shares for one euro or two thousand five hundred at fifty cent each. If an individual bought a thousand shares then that individual would own twenty per cent of the company. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Accounting & Financial Management section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Accounting & Financial Management essays

  1. A2 Business CourseWork

    They help your business and you help theirs. The suppliers will want to make sure that they not being ripped off because Tesco will be almost inevitably the bigger business and the bigger controller of the prices because they have less to loose. Conflicts could arise when Tesco are not willing to pay enough money to the suppliers,

  2. finance for soletrader and partnership

    Your contract is with a finance company not the retailer who will own the goods until the final payment is made. The finance company can take the goods back if you don't keep up your repayments. You will be liable for any damage caused to the goods during the contract period.

  1. Introducing Accounting - Purpose, Information, Statements and Ledgers

    Due to Private and Confidential, we are unable to get the financial statements of Mega Trax Plastic (Seremban) Sdn.Bhd. 2.1 Background of the Companies 2.1.1 Mega Trax Plastic (Seremban) Sdn. Bhd. Mega Trax Plastic (Seremban) Sdn. Bhd. is a company of service nature.

  2. The maintenance of accurate records supplies the company with the financial data that assists ...

    This could be prevented through negotiating with a supplier with lower prices or through making use of economies of scale. The company could also look for alternative and cheaper suppliers. Budgeting is the most effective way to control cash flow as it shows expenditure and income patterns, it also sets

  1. Business studies coursework - On the next page, there is a table of Safeways ...

    By focusing on price promotions, fresh foods and product innovation, customer service, product availability and new store formats, we have achieved strong rates of sales growth and profit recovery." The chief executive - Carlos Criado-Perez talks about the stores opened this year: "We opened four second-generation megastores in May and

  2. management accounting

    Given the decline in company profits subsequent to the introduction of the Large Model it is highly likely that the current method underestimates the true cost of the Large Model while overestimating the unit cost of the Medium model resulting in the Large Model being currently underpriced or even being priced below the true cost.

  1. In this section I am going to be looking at various life stages and ...

    university that are reaching their peek at university and getting ready to graduate. At this point in their life they are not really financial blessed so the graduate loan will help the individual settle down in their new life. The customer can borrow up �10,000 and can apply for repayment

  2. I am going to produce a report which assesses the working capital management of ...

    assess the few people they sell goods to on credit as this will avoid any bad debt from occurring. From the calculation of the debtors collection period, it is clear that M&S debtors are taken longer days to pay than in the previous years, and this could cause cash to

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work