I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider



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Partnerships

. These are arrangements between individuals to carry on business in common with a view 

to profit. A partnership, however, involves obligations to others, and so a partnership is usually governed 

by a partnership agreement. Unless it is a limited liability partnership (LLP), partners will be fully liable 

for debts and liabilities, for example if the partnership is sued. 

 

BPP Tutor Toolkit Copy




PART A: THE CONTEXT AND PURPOSE OF FINANCIAL REPORTING 

 

6

 

In law, sole traders and partnerships are not separate entities from their owners. However, a limited 

liability company is legally a separate entity from its owners. Contracts can therefore be issued in the 

company's name. 

For accounting purposes, all three entities are treated as separate from their owners. This is called the 




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