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What are the implications of this arrangement for the partners and the partnership




Tory, Becky, Hal, and Jere form TBHJ Partnership as equal owners. TBJH Partnership;rents heavy tools and equipment. Becky and Hal are married to each other;while Tory and Jere are brothers but are not related to Becky or Hal. Because;Becky and Hal have other jobs, Tory and Jere are to be the full-time managers of;the business. Although Tory and Jere will run the business full-time, Becky will;help in the store on weekends and some evenings. Hal will lend his financial expertise;to the firm by doing the bookkeeping and preparing the tax returns. Even;though the four have equal ownership interests, it is not clear how each owner is;to be compensated so that there is equity among the partners yet rewards for those;engaged in specific tasks. Hal has told the others that they cannot receive deductible;salaries. However, he suggests that guaranteed payments be made to each partner/;employee for an agreed-upon amount based on the value of the services each;provides and/or the time spent at the store. Discuss the ramifications of employing;this plan and whether this is an equitable way to allocate compensation among the;partners. What are the implications of this arrangement for the partners and the;partnership?


Paper#23596 | Written in 18-Jul-2015

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