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Tax Planning between Partnership Firm and Corporate

   

Added on  2019-09-23

3 Pages870 Words425 Views
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Tax Planning between the partnership firm andcorporate. The provisions for taxation aredifferentiatedfor the Partnership firm,individualandcorporation.Incase of partnership firm, the profit isdistributed among the partners,and they are personally liable for a tax, asperUS federal tax law. Personal taxliabilitiesare computedbased on the tax scale,states in USfederal tax rules, basicallythe tax rate falls between the 10 to 37 percentages, these ratesare appliedbased onthe incomes.While tax liabilities of the corporationare computedbased on the turnover ofthecorporation, and for corporate tax rate arefallingbetween the 15 % to38percentages. (Differencebetween.net. (2019). In short the estate planningtominimizethe tax obligation are different in case of partnership firm and inthecaseofa corporation.Advantage of the formulation of corporation V/S Partnership firm Thecorporateserve anumberof benefits and advantage again the partnership firm,looking from the corporatestructurepoints of view the formulation of corporate aremore expensive than the partnership firm. Further Personal liabilities of the promotersandshareholdersare limited tothe outstanding amountof shares only, where suchthings are not found in case of partnership firm. More over the liabilities of partnersunder partnership firm are unlimited. In addition to these company can easily invitesthe public for financial assistance, while such options are not available in case ofapartnership firm. (Smallbusiness.chron.com. (2019).Company Succession Plan and its connection with the vision The companycurrently looking for Expansion of its operation as a part ofits visionarystrategy. Further, new product and services are added by firm in current portfolio.The expansion strategy required aggressive marketing in other geographical areas,here company use its brand and popularity inthe current geographical markettointroduceits new product andserviceinother geographicalarea and the expansionstrategy completely aligns with the company visionstatements,(Smallbusiness.chron.com. (2019).
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