Partner's Capital Account In The Partnership example essay topic

TABLE OF CONTENTS TITLE PAGE... 2 EXECUTIVE SUMMARY... 3 BUSINESS OWNERSHIP... 3 FINANCING... 4 MARKETING... 5 CONCLUSIONS / RECCOMENDAITONS...

10 BIBLIOGRAPHY... 11 APENCICESAPPENDIX I... 12 APPENDIX II... 18 APPENDIX. ..

23 APPENDIX IV... 27 APPENDIX V... 28 Proposal for:" GREENACRES REALTY " Compiled by BALENTINE SOLUTIONS. 01/03/05 The purpose of this proposal is to provide in depth information, research and knowledge of several different approaches that can be taken into account when deciding on what avenue to pursue for "Greenacres Realty". Balentine Solutions trusts that once this proposal has been explored, you will be able to come to a concise decision and your business will be ready for existence. BUSINESS OWNERSHIP There are two possibilities of business ownership and structure that must be considered for Greenacres realty, they are: 1.

PARTNERSHIP Partnerships are simple and relatively inexpensive to establish. They can be made up of a minimum of two and a maximum of 20 members. The ability to raise capital becomes somewhat easier with there being a wider choice from personal sources and financial services. Everyone involved brings with them an area of expertise and the business can be sub-divided into specialization. The work load is shared. Partners decide on how profits and / or debts are to be distributed and a contract is drawn up outlining such issues before the business is started, this ensures everyone's protection.

Although a contract is drawn up it must also be understood that partnerships do not have limited liability, thus, if one or more partners are not able to pay a debt, die or decide to break the partnership agreement, it is left upon the shoulders of the remaining members to cover any incurred costs. A partnership does not pay income tax. Each partner records their share of the profit / loss on their individual tax return, however, a separate income tax return must be lodged to report the income of the partnership. Tax return from for partnership see appendix Partnership agreement see appendix II When deciding on whether to enter into a partnership you must thoroughly converse with one another and ensure that everyone agrees with how the proposed running of the business is to occur.

Outlining the responsibilities of each partner would be of wise consideration so that everyone is aware of their involvement within the business. It must be stipulated that personal issues and personality clashes can be serious in the demise of a partnership. Do take this into account. 2. PRIVATE COMPANY Private companies are separate legal entities and have a limited liability, they are made up of at least one to a maximum of 50 members. There is safety to members in regards to debts, you will only pay the amount equivalent to your share in the company.

To exist as a company a director, a member and a secretary are needed. This decision can be based on areas of expertise. As a private company Greenacres Realty will not be listed on the ASX and no shares will be offered to the public. A private company must submit an annual report of their full financial records to the Security commission.

Tax return form for company and company number see appendix FINANCINGDue to the nature in which the finance is needed the best option is apply for a bank overdraft, business line of credit and business loan. Intrest rates are very competitive and it wise to shop around in order to find what in right for your businesses needs. The below is a table comparing factors of different lending institutions for the amount of $30000 INSTITUTION COMMONWEALTH Fixed better business loan WESTPAC Business development loan fixed rate SAVINGS AND LOANS Business latitude loan and overdraft ANZ INTEREST RATE Loan Term Interest Rate 1 year 7.55% p. a. 2 year 7.55% p. a. 3 year 7.60% p. a 4 year 7.60% p. a. 5 year 7.65% p. a.

6 year 7.65% p. a. 7 year 7.65% p. a. 1 Year 7.50%2 Year 7.54%3 Year 7.58%4 Year 7.64%5 Year 7.70%7 Year 7.77%10 Year 7.90% Loans less than $100,000 8.21% pa Contact personal banker TERM Up to 7 years Up to 10 years Up to 10 years Up to 15 years (variable) Up to 10 years (fixed rate). SECURITY Residential property Unsecured or secured by various forms of security resident commercial or rural property, business assets, MARKETING marketing plan is vital for the success of business. How else will the public know you exist? Consider the following: SAMPLE MARKETING PLAN GREENACRES REALTY PRODUCT Residential property, leasing, appraisals, commercial property PLACE Location of product i.e. Street address PRICE Based on market structure PROMOTION Pamphlets, shop signage, billboards, internet, radio, TV, print media The focus is on the grand opening of Greenacres realty and making sure that the public is aware of your existence.

Door to door introduction's The above is an example of a pamphlet that can be left at a residence if the occupant is away. This is a great way to establish interpersonal relationships with potential clients. Also indicates to people that your business is 'approachable' and 'caring'. LETTER BOX DROP Letter box drops are also a means of advertising properties for sale in your area.

Creating an internet web site for your business allows consumers to access your service and view properties at any time refer to appendix IV Mounted posters in front of properties give great exposure of your business. It is important that your name is easily recognizable in such a competitive market. Coming up with a slogan and 'mascot' will make your business stand out. LJ HOOKER has - 'Nobody does is better', 'thank you MR. Hooker' and the Mr. Hooker bear " Some suggested slogans for your business are: Greenacres Realty - 'Dreams do come true'Gets you what you want " Newspaper editor als appear every weekend they reach a vast array of consumers an appear to be very affective. For an example of a newspaper advertisement / editor al see appendix V COSTS QUANTITY CONSUMERS REACHED DISTRIBUTION COST PRODUCTION COST TOTAL TV AD (30's non primetime) 1 once a week for 3 weeks In the 1000's nil $1800 ($600 per ad) $1800 PAMPHLET (letter box drops) 3000 (1000 meet and greets 1000 grand openings 1000 service information) 3000+ Could hire someone to drop pamphlets in letter boxes or can be done bye yourself $1 per pamphlet (assuming made by own computer and supplies 0 $3000 SHOP SPACE Quart eley Varied but high traffic volume 1000 Cost of sign $200 about $1200 NEWSPAPER 1 quarter size ad Saturdays in real estate sections for 2 weeks High nil $37.95 per cm block 25 cm 2$948.75 $948.75 WEBSITE one Varied high nil Can make it yourself. However more professional approach would be to hire a designer$50 and hour for 6 hours $300 PHONEBOOK One yearly quarter size ad High nil $1000 $1000 RADIO 4 a day for 3 weeks (2- 6 am -9 am 2- 4 pm-7 pm) In the 1000's nil $30 per ad x 21 630 TOTAL $8878.75 CONCLUSIONS / RECCOMENDATIONSAll aspects of the business environment must be considered when deciding on what path is best for a new business.

Correct procedure must be followed to ensure that your business survives and prospers in such a competitive industry. Ballantyne recommends that Greenacres realty highly considers the following when deciding which avenue to take: 1. To exist as a partnership. 2.

To create a relationship with a business banker and consider the Savings and Loans Business Latitude Loan and Overdraft 3. Create a creative and effective marketing plan similar to the sample plan With all the information given we are confident a concise decision can now be made. BIBLIOGRAPHY S. Chapman, N. Deve nish, M. Shall, 2000. Business Studies in Action Preliminary Course, Sydney, AustraliaATOBusiness Structures web your business web Entry Point Starting a Business web bank Business service, web fixed Westpac Bank, Business Services, web and Loans, Business Service web rates. asp#4 ANZ Bank, Business Services web drawn. asp APPENDIX APPENDIX II Partnership Agreement of GREENACRES REALTY THIS AGREEMENT OF PARTNERSHIP, effective as of (date) by and between the undersigned, to wit: {names of partners} NOW, THEREFORE IT IS AGREED: 1. Formation. The undersigned hereby form a General Partnership in accordance with and subject to the laws of the State of South Australia.

2. Name. The name of the partnership shall be GREENACRES REALTY. 3. Term.

The partnership shall begin on (date) and shall continue until December 31 of the same year and thereafter from year to year unless earlier terminated as hereinafter provided. 4. Purpose. The only purpose of the partnership is to invest the assets of the partnership solely in stocks, bonds, and other securities ('securities') for the education and benefit of the partners.

5. Meetings. Periodic meetings shall be held as determined by the partnership. 6. Capital Contributions. The partners may make capital contributions to the partnership on the date of each periodic meeting in such amounts as the partnership shall determine; provided, however, that no partner's capital account shall exceed twenty percent (20%) of the capital accounts of all partners.

7. Value of the Partnership. The current value of the assets of the partnership, less the current value of the liabilities of the partnership, (hereinafter referred to as the 'value of the partnership') shall be determined as of a regularly scheduled date and time ('valuation date') preceding the date of each periodic meeting determined by the Club. 8. Capital Accounts. A capital account shall be maintained in the name of each partner.

Any increase or decrease in the value of the partnership on any valuation date shall be credited or debited, respectively, to each partner's capital account on that date. Any other method of valuing each partner's capital account may be substituted for this method, provided the substituted method results in exactly the same valuation as previously provided herein. Each partner's contribution to, or capital withdrawal from, the partnership shall be credited, or debited, respectively, to that partner's capital account. 9. Management. Each partner shall participate in the management and conduct of the affairs of the partnership in proportion to his capital account.

Except as otherwise determined, all decisions shall be made by the partners whose capital accounts total a majority of the value of the capital accounts of all the partners. 10. Sharing of Profits and Losses. Net profits and losses of the partnership shall inure to, and be borne by, the partners, in proportion to the value of each of their capital accounts. 11. Books of Account.

Books of account of the transactions of the partnership shall be kept and at all times be available and open to inspection and examination by any partner. 12. Annual Accounting. Each calendar year, a full and complete account of the condition of the partnership shall be made to the partners.

13. Bank Account. The partnership may select a bank for the purpose of opening a bank account. Funds in the bank account shall be withdrawn by checks signed by any partner designated by the partnership. 14. No Compensation.

No partner shall be compensated for services rendered to the partnership, except reimbursement for expenses. 15. Additional Partners. Additional partners may be admitted at any time, upon the unanimous consent of the partners, so long as the number of partners does not exceed twenty five (25). 16. Removal of a Partner.

Any partner may be removed by agreement of the partners whose capital accounts total a majority of the value of all partners' capital accounts. Written notice of a meeting where removal of a partner is to be considered shall include a specific reference to this matter. The removal shall become effective upon payment of the value of the removed partner's capital account, which shall be in accordance with the provisions on full withdrawal of a partner noted in paragraphs 18 and 20. The vote action shall be treated as receipt of request for withdrawal. 17. Termination of Partnership.

The partnership may be terminated by agreement of the partners whose capital accounts total a majority in value of the capital accounts of all the partners. Written notice of a meeting where termination of the partnership is to be considered shall include a specific reference to this matter. The partnership shall terminate upon a majority vote of all partners' capital accounts. Written notice of the decision to terminate the partnership shall be given to all the partners. Payment shall then be made of all the liabilities of the partnership and a final distribution of the remaining assets either in cash or in kind, shall promptly be made to the partners or their personal representatives in proportion to each partner's capital account. 18.

Voluntary Withdrawal (Partial or Full) of a Partner. Any partner may withdraw a part or all of the value of his capital account in the partnership and the partnership shall continue as a taxable entity. The partner withdrawing a part or all of the value of his capital account shall give notice of such intention in writing to the Secretary. Written notice shall be deemed to be received as of the first meeting of the partnership at which it is presented. If written notice is received between meetings it will be treated as received at the first following meeting. In making payment, the value of the partnership as set forth in the valuation statement prepared for the first meeting following the meeting at which notice is received from a partner requesting a partial or full withdrawal, will be used to determine the value of the partner's account.

The partnership shall pay the partner who is withdrawing a portion or all of the value of his capital account in the partnership in accordance with paragraph 20 of this Agreement. 19. Death or Incapacity of a Partner. In the event of the death or incapacity of a partner (or the death or incapacity of the grantor and sole trustee of a revocable living trust, if such trust is partner pursuant to Paragraph 16 A hereof), receipt of notice shall be treated as a notice of full withdrawal.

20. Terms of Payment. In the case of a partial withdrawal, payment may be made in cash or securities of the partnership or a mix of each at the option of the partner making the partial withdrawal. In the case of a full withdrawal, payment may be made in cash or securities or a mix of each at the option of the remaining partners.

In either case, where securities are to be distributed, the remaining partners select the securities. Where cash is transferred, the partnership shall transfer to the partner (or other appropriate entity) withdrawing a portion or all of his interest in the partnership, an amount equal to the lesser of (i) ninety-seven percent (97%) of the value of the capital account being withdrawn, or (ii) the value of the capital account being withdrawn, less the actual cost to the partnership of selling securities to obtain cash to meet the withdrawal. The amount being withdrawn shall be paid within 10 days after the valuation date used in determining the withdrawal amount. If the partner withdrawing a portion or all of the value of his capital account in the partnership desires an immediate payment in cash, the partnership at its earliest convenience may pay eighty percent (80%) of the estimated value of his capital account and settle the balance in accordance with the valuation and payment procedures set forth in paragraphs 18 and 20. Where securities are transferred, the partnership shall select securities to transfer equal to the value of the capital account or a portion of the capital account being withdrawn (i. e., without a reduction for broker commissions). Securities shall be transferred as of the date of the club's valuation statement prepared to determine the value of that partner's capital account in the partnership.

The Club's broker shall be advised that ownership of the securities has been transferred to the partner as of the valuation date used for the withdrawal. 21. Forbidden Acts. No partner shall: Have the right or authority to bind or obligate the partnership to any extent whatsoever with regard to any matter outside the scope of the partnership purpose. Except as provided in paragraph 16 A, without the unanimous consent of all the other partners, assign, transfer, pledge, mortgage or sell all or part of his interest in the partnership to any other partner or other person whomsoever, or enter into any agreement as the result of which any person or persons not a partner shall become interested with him in the partnership. Purchase an investment for the partnership where less than the full purchase price is paid for same.

Use the partnership name, credit, or property for other than partnership purposes. Do any act detrimental to the interests of the partnership or which would make it impossible to carry on the business or affairs of the partnership. This Agreement of Partnership shall be binding upon the respective heirs, executors, administrators, and personal representatives of the partners. The partners have caused this Agreement of Partnership to be executed on the dates indicated below, effective as of the date indicated above. Partners: {Signatures of partners} The Australian Company Number and the ABN On forming a company, you are issued with an Australian Company Number (ACN) by the Australian Securities and Investments Commission. When a company registers for an ABN, the number issued by the Australian Business Registrar is its ACN with two check digits at the beginning: Companies don't have to quote both the ABN and ACN on documents.

Under the Corporations Act, a company is required to show its ACN on all public documents and negotiable instruments. However, companies with an ABN can use the ABN in place of their ACN, on the condition that: o the ABN includes the company's ACN as the last nine digits, and o the company quotes the ABN in the same way it quoted its ACN. APPENDIX newspaper.