The accounting entity concept is the principle that financial records are prepared for a distinct unit or entity regarded as separate from the individuals that own it, ensuring clear financial reporting.
Appropriation in accounting refers to the allocation of net profits of an organization in its accounts. This can include dividends to shareholders, transfers to reserves, and amounts for taxation.
A buy-and-sell agreement is a strategic approach utilized in sole proprietorships, partnerships, and close corporations to safeguard the continuity of the business upon the death or disability of a proprietor, partner, or shareholder. Such agreements involve selling the business interests to remaining members according to a predetermined formula.
A clawback is a provision in a law or contract that limits or reverses a payment or distribution for specified reasons.
The conduit approach allows income or deductions to flow through to another entity, such as a partnership or trust, enabling tax liabilities to be managed at the beneficiary or partner level.
A connected person refers to individuals or entities that are related to a director under the Companies Act, with implications for disclosure requirements.
An Employer Identification Number (EIN) is a unique Taxpayer Identification Number (TIN) assigned to entities other than individuals, such as partnerships, corporations, estates, and trusts. The EIN is used for the purpose of identifying businesses and certain other entities for tax reporting.
A U.S. tax form used by partnerships and joint ventures for reporting income, deductions, gains, losses, and informational items.
Incorporation of audit firms involves the formation of a limited company by a partnership to limit its liability against claims for negligence, offering essential protection while maintaining legal compliance under the Companies Act.
A joint account is a bank or building-society account held in the names of two or more people, allowing any of the account holders to operate it independently. It is commonly used by spouses, partners, or business collaborators.
A liability that is shared by a group, where each member can be held responsible for the entire obligation if other members fail in their undertaking. Commonly found in partnerships and co-signed agreements.
Relief available to sole traders, partnerships, and companies making losses, as adjusted for tax purposes.
An individual, trust, estate, partnership, association, company, or corporation having certain legal rights and responsibilities.
Relationship capital refers to the value created by a business's relationships with external parties, such as customers, suppliers, and partners. This concept is a subcomponent of intellectual capital, focusing on the trust, loyalty, and long-term connections that can enhance business performance.
Schedule K-1 is a tax document used to report the incomes, deductions, and credits of partnerships, S corporations, estates, and trusts for tax purposes.
Syndication is a method of selling property whereby a sponsor, or syndicator, sells interests to investors. It can take various forms including partnerships, limited partnerships, tenancy in common, corporations, limited liability companies, or S Corporations.
Software that helps taxpayers plan for and prepare their tax returns. Programs such as TurboTax and TaxCut help taxpayers analyze their tax situation and take actions to minimize tax liability.
A taxpayer is an individual or entity that is liable to pay taxes to a governmental authority, including but not limited to the Internal Revenue Service (IRS) in the United States.
