Discussion Forum week 8 PDF

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Discussion Forum unit 8...

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This week's discussion is based on the following scenario. Read the scenario and answer both questions in the Discussion Assignment forum. Scenario: Sports Memorabilia Store Farah and David decide to form a sports memorabilia retail partnership. They have known each other since business graduate school and have always worked well together on various projects. The business is doing well but cash flow is very tight. Farah takes several calls from vendors asking for payment. He believed David had been paying the bills. When he asks about this, David admits to embezzling from the partnership.  

What liability does Farah face as a result of the theft? Are you for or against a partnership? Please explain.

Your Discussion should be a minimum of 250 words in length and not more than 450 words. Please include a word count. Following the APA standard, use references and intext citations for the textbook and any other sources.

There are several types of partnership: general, limited partnership (LP), and limited liability partnership (LLP). All of the partnership types have advantages and disadvantages also different mechanics. The assignment does not really state what type of partnership Farah and David formed, I will try to cover all possibilities. If their partnership is general, all partners have personal and equal liabilities. if there is any debt, both partners are liable (Korchak, 2017). Therefore, even though it was David's liability to make repayments, Farah is also liable and must repay the whole debt. I am not certain what kind of partner Farah is, but as soon as she receives calls from vendors, that she is a general partner. If so, Farah is liable for this debt and must repay the debt as soon as possible. If she is a limited partner, then she has a liability that is limited by her initial investment which can not be exceeded by the debt. In the case of the LLP (limited liability partnership), Farah's liabilities are also limited by her initial investment. The good thing is that "creditors cannot go after a partner's personal assets or income." (Beattie, 2020). As a result, Farah is facing a disturbing situation where she is liable to pay the debt or for a part of it. Although Farah and David knew each other for a long time and worked together on different projects, there must have been a revising mechanism in the company, which would prevent such malpractice of partnership. The partnership mechanics means responsibility to each other, they should check things and validate books and registers, this will result in healthy business practice. I would suggest the LLP type of partnership because it seems the safest choice; it is safer, more formal and it has several advantages. such as the ability to let partners in and out, flexibility, and partners can lose assets in the partnership, but not outside of it Word count: 324 References -Andrew Beattie. (September 25, 2020). Limited Liability Partnership (LLP): The Basics. Retrieved from https://www.investopedia.com/articles/investing/090214/limitedliabilitypartnership-llp-basics.asp

-Johnathan Korchak. (August 24, 2017). What is a general partnership? Retrieved from https://www.informdirect.co.uk/business-management/general-partnership-uk-what-is-it/...