Partnership

Patriani Wahyu Dewanti, M.Acc.

What is a Partnership ?

2 or more Partners For Profit Business

State Law Shares Profits

Joint and Individual Liability Share Control

Partnership
A type of business organization in
which two or more individuals pool
money, skills, and other resources,
and share ... (BusinessDictionary)
Definition • Partnerships allow two or more people to share a
business’s risk and reward.
• Partners can contribute their expertise and their
capital, either real assets or financial assets to the
venture.
• Partnerships are common in many areas of business,
including service industries, retail trade, wholesale
and manufacturing operations, and the professions,
particularly the legal, medical, and public accounting
professions.
• In 1992 and 1997, the Uniform Partnership Act
(1914) was revised by the National Conference and
has been adopted, with revision, by several states. the
adoption of the entity theory to define the nature of
partnerships
Article of 1. The types of products and services to be
provided and other details of the business’s

Partnership operations
2. Each partner’s rights and responsibilities in
conducting the business
3. Each partner’s initial investment including
the value assigned to noncash
assetinvestments
4. Additional investment conditions
5. Asset withdrawal provisions
6. Profit- and loss-sharing formulas
7. Procedures for dissolving the partnership
Financial
Reporting
Accounting for Partnership is the same as
accounting for sole proprietor
Design to meet the need of :
1. The partnership’s creditors
2. The Partners
3. The Internal revenue Service (IRS)
 Indonesia  Adopted Standar Akuntansi Keuangan Entitas
Tanpa Akuntabilitas Publik (SAK ETAP)
Perspective  Separate Business Entity
Only For Partner purpose
Financial reporting audited id not mandatory
Accrual Basis and Cash Basis.
 Regulation : KUHP and KUHD
 • Definition (KUHP Bab VIII Bagian 1 Pasal 1618 )
Indonesia :
1. Association in two indviduals or more
Perspective 2. To Invest
3. An efforts to looking for profit Formation
A written agreement in legal formation. Which
explain :
4. Name of the partnership
5. Type of business
6. Partner contribution
7. Detail about gain or loss distribution including
salary, bonus, etc.
8. Procedur pf partnership changes
9. Others, such as...accounting method for
recording trasactions.
 Indonesia
Perspective

1. Active Partnership
2. Pasive Partnership
Type of
Partnerships
LIMITED
PARTNERSHIP
What is a Limited Liability
Partnership (LLP)
• LLPs also have a separate legal personality.
• LLPs must have at least for the full extent of its assets.
• The LLPs is liable for the full extent of its assets.
• An LLP is managed by all of its members.
• LLPs must prepare and file annual accounts and an
annual return to Companies House.
• Members are entitled to an equal share of the
company’s capital and profits.
 Questions
1. What are the characteristics of a partnership?
2. What should be included in the articles of a partnership?
3. How would partners appraise an initial noncash investment value?
4. Why do some profit-sharing agreements provide for salary and interest
allowances?
5. Are partner salary allowances expenses of the partnership?
6. Find examples of types of partnerships ( please provide two examples for each
type)