Question Tag: Partnership

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  • 15 Marks

TX – May 2025 – SKILLS – Q5 – Introduction to Taxation and Tax Administration

Explain key taxation concepts (incidence, burden, impact, shift, base) and residence rules for various individuals (employed persons, executors, partners, itinerant workers).

a. The knowledge of basic concepts in taxation assists in having a good understanding of taxation and its principles.

Your boss has mandated you to explain the following concepts to other members of staff who do not have a good knowledge of taxation:
(i) Tax incidence (2 Marks)
(ii) Tax burden (2 Marks)
(iii) Tax impact (2 Marks)
(iv) Tax shift (2 Marks)
(v) Tax base (2 Marks)

b. The determination of residence is vital for the purpose of identifying the relevant tax authority of a taxpayer.

Required:
Explain the rules of residence as they relate to the following individuals:
(i) Persons in employment (1 Mark)
(ii) An executor (1 Mark)
(iii) Partners in partnership (1 Mark)
(iv) An itinerant worker (2 Marks)

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  • 20 Marks

BL – May 2025 – Q1 – Agency Law

Explain situations for agency without authority, distinguish case law and statutes, attributes of LLP, reasons to lift corporate veil.

a. There are situations in which a person could be another person’s agent without the latter’s authority.

Required:

Explain TWO situations in which a person could be an agent without the express authority of the principal.  (4 Marks)

b. Statutes and case law are among the sources of Nigerian law.

Required:

Distinguish between case law and statutes.      (6 Marks)

c. There is a distinction in the characters of a general partnership and a limited liability partnership.

Required:

State FOUR attributes of a limited liability partnership. (6 Marks)

d. The Court would disregard the separate personality of a company for justifiable reasons.

Required:

State FOUR reasons for which the Court would lift a company’s veil of incorporation.

(4 Marks)

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  • 20 Marks

BL – Nov 2024 – L1 – Q3 – Partnership Elements and Fraud Offences

State elements of valid partnership; fraud-related offences; explain e-contract and digital signature; seller's rights against goods.

a. Certain rules determine whether a partnership exists or not. Required: State the elements of a valid partnership.                             b. “The Criminal Code … has not created a single general offence known as fraud but has created a number of offences that are fraud related”. Required: State FOUR fraud related offences.                                                                                                                                  c. E-contract enhances the ease of doing business. Required: Explain the following:                                                                                          i. e-contract;                                                                                                                                                                                                                        ii. Digital signature.                                                                                                                                                                                                         d. A seller of goods has rights not only against the buyer but the goods also. Required: Explain TWO rights of a seller against his goods.

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  • 20 Marks

POBL – JUL 2020 – L1 – Q1 – Business Entities in Ghana

Discuss the veracity of the assertion that the only recognized type of business entity in Ghana is a limited liability company.

Ama Too Known, a second-year law student has the tendency of displaying her knowledge and

her ignorance in the law to her non law undergraduate students. She has just advised Abena who

was to go into business that the only recognized type of business entity in Ghana is a limited

liability company.

Required: Discuss the veracity or otherwise of this assertion by Ama too known.

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  • 22 Marks

STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications

Advise on tax implications of establishing a company, partnership, or sole proprietorship and identify which offers the least tax exposure for an investor.

As a renowned tax consultant, a potential investor in the real estate sector in Ghana is seeking your expert opinion on the tax implications of establishing a company, a partnership or a sole proprietorship and which form of the business organisations gives the least tax exposure for an investor.

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  • 20 Marks

STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation

Discuss tax implications of establishing a subsidiary, partnership, or branch for Urok Group in Ghana.

(a). The majority shareholder and President of Urok Group of Companies intends to expand his business activities into West Africa. His initial enquiries show that Ghana is a suitable country for his investment. The investor has been informed that there are different tax treatments for the various forms of business organisations in Ghana. As a renowned tax consultant, the investor seeks your expert opinion on the tax implications of establishing following forms of business organisations:

I. A wholly subsidiary company (5 marks)

II. A Partnership (5 marks)

III. A Branch (5 marks)

(b). Which of the above forms of business organisations gives the least tax exposure on the investment Urok Group of Companies intends to make in Ghana.

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  • 20 Marks

POT – Mar 2025 – L2 – Q4- Partnership Taxation

Compute Nmani Pharmacy’s chargeable income for 2023.

a) Three pharmacy students, Abanga, Banzey and Chambas who completed the Tamale Technical University have teamed up to undertake a business venture in the pharmaceutical sector under a Trading Name Nmani Pharmacy. They agreed to share profit and losses in the ratio 3:2:1 for Abanga, Banzey and Chambas respectively. The details provided below relate to the business financial performance for the year 2023.

 

Details GH¢
Sales 663,400
Cost of goods sold:
Opening inventory 150,000
Purchases 300,000
450,000
Closing inventory (120,000)
330,000
Gross profit 333,400
Less expenses:
Staff cost 102,000
Business promotions 58,100
Depreciation 98,200
Electricity and water 53,000
Expired drugs 12,100
Donation 78,000
Rent and rates 15,000
Sundry expenses 50,000
Vehicle running cost 63,000
(529,400)
Net profit 134,000
Tax paid (15,200)
Net profit after tax 118,800

Additional Information:

  1. Staff cost includes monthly stipend allocations to the aged parents of the partners totaling GH¢18,000.
  2. All three Partners are taking care of their aged parents who are more than 60 years.
  3. Business promotions include lunch expenses of the partners amounting to GH¢21,200.
  4. Donations include funeral donation made during the funeral of the mother of the Vice Chancellor of the Tamale Technical University amounting to GH¢20,000.
  5. Sundry expenses include fine amounting to GH¢32,000 imposed by the Food and Drugs Authority for failure to remove some expired drugs from shelves.
  6. The Partners received Withholding Tax Certificates indicating an amount of GH¢15,200 from the Binabaani European Hospital for medical consumables supplied to the hospital.
  7. Capital allowance has been agreed with the Ghana Revenue Authority at GH¢104,200.

Required: i) Compute the chargeable income for Nmani Pharmacy for the 2023 Year of Assessment.

(ii) Compute the net tax payable by each partner for the year 2023.

(b) In line with the provisions of the Income Tax Act, 2015 (Act 896), partnership and limited liability companies in Ghana are taxed in accordance with their residency status in a year of assessment.

Required: State the criteria for the determination of the residency status of partnership and limited liability companies.

(c) All over the world, countries have introduced policies to guarantee income for their hard-working workforce who may go on retirement to enable them to live meaningful lives after retirement. Ghana’s pension system aims to provide personal financial security for employees in their retirement years.

Required: Describe the current pension system in Ghana.

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  • 15 Marks

FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements

Prepare the profit or loss and appropriation account and financial position statement for a partnership at retirement and admission of partners.

Atsu, Baba, and Chawe are in partnership, providing management services, sharing profits in the ratio 5:3:2 after charging annual salaries of GH¢18,000 each. Current accounts are not maintained. On 30 June 2024, Atsu retired.

Dua was admitted on 1 July 2024 to the partnership and is entitled to 30% of the profits of the current partnership, with the balance being shared equally between Baba and Chawe.

The previous partnership trial balance as of 30 June 2024 was as follows:

Description GH¢ GH¢
Capital accounts – Atsu 12,519
Capital accounts – Baba 65,844
Capital accounts – Chawe 33,618
Trade receivables 138,615
Inventories at 1 July 2023 6,000
Operating expenses 419,166
Investment 300
Bank overdraft 33,510
Trade payables 52,218
Revenue 565,296
Total 663,543 663,543

Additional Information:

  1. Inventory remains at GH¢6,000.
  2. Full provision is required for an irrecoverable debt of GH¢3,450.
  3. Adjustments agreed by partners:
    • The investment is to be included at GH¢4,500.
    • Goodwill, which remains in the books, is valued at GH¢72,000.
  4. On 1 July 2024, GH¢30,000 due to Atsu was transferred to Dua. The balance due to Atsu is to be repaid over three years, commencing on 1 July 2024.
  5. Dua introduced cash of GH¢22,500 to the partnership.

Required:
i) Prepare the statement of profit or loss and appropriation account of the previous partnership for the year ended 30 June 2024 and a statement of financial position at that date. (9 marks)
ii) Prepare the statement of financial position for the current partnership as of 1 July 2024. (6 marks)

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  • 15 Marks

AT – Nov 2017 – L3 – Q7 – Tax Implications of Mergers and Acquisitions

Advise on tax implications for Aba Foods merger/acquisition options with Ifedi Foods.

The prevailing economic condition has led to the business cessation of many SMEs. Aba Foods Limited, a well-known food and beverage company in Abia State, faced difficulties in securing long-term loans, preventing the replacement of its outdated equipment and leading to losses. To ensure continuity, the company considered mergers or acquisitions and entered discussions with Chief Egodi of Ifedi Group. Chief Egodi, concerned about the tax implications of potential arrangements, sought advice from your firm, Aliyara & Co., Chartered Accountants.

Required:
Provide a presentation in the form of advice:

(a) Explain the tax implications of Aba Foods Limited merging with Ifedi Foods and Beverage Limited, with Ifedi inheriting all assets and liabilities. (5 Marks)
(b) Explain the tax implications if Ifedi Foods and Beverage Limited is reconstituted to take over Aba Foods’ assets and liabilities. (5 Marks)
(c) Explain the tax implications if Ifedi Foods and Aba Foods enter a Joint Venture or Partnership Agreement. (5 Marks)

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  • 5 Marks

BL – Nov 2020 – L1 – SB – Q6c – Partnership Law

Assess the legality of different partnership arrangements.

Comment on the legality of the following relationships operating as partnerships:

i. A partnership of 16 persons established for charitable purposes
ii. Adex cooperative society consisting of 500 members
iii. Black and Blue law firm consisting of 31 lawyers
iv. Stone Partnership firm comprising Segun aged 28, Tunde aged 17
v. A partnership of volunteers for the purpose of helping persons displaced by flood.

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  • 15 Marks

TX – May 2025 – SKILLS – Q5 – Introduction to Taxation and Tax Administration

Explain key taxation concepts (incidence, burden, impact, shift, base) and residence rules for various individuals (employed persons, executors, partners, itinerant workers).

a. The knowledge of basic concepts in taxation assists in having a good understanding of taxation and its principles.

Your boss has mandated you to explain the following concepts to other members of staff who do not have a good knowledge of taxation:
(i) Tax incidence (2 Marks)
(ii) Tax burden (2 Marks)
(iii) Tax impact (2 Marks)
(iv) Tax shift (2 Marks)
(v) Tax base (2 Marks)

b. The determination of residence is vital for the purpose of identifying the relevant tax authority of a taxpayer.

Required:
Explain the rules of residence as they relate to the following individuals:
(i) Persons in employment (1 Mark)
(ii) An executor (1 Mark)
(iii) Partners in partnership (1 Mark)
(iv) An itinerant worker (2 Marks)

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  • 20 Marks

BL – May 2025 – Q1 – Agency Law

Explain situations for agency without authority, distinguish case law and statutes, attributes of LLP, reasons to lift corporate veil.

a. There are situations in which a person could be another person’s agent without the latter’s authority.

Required:

Explain TWO situations in which a person could be an agent without the express authority of the principal.  (4 Marks)

b. Statutes and case law are among the sources of Nigerian law.

Required:

Distinguish between case law and statutes.      (6 Marks)

c. There is a distinction in the characters of a general partnership and a limited liability partnership.

Required:

State FOUR attributes of a limited liability partnership. (6 Marks)

d. The Court would disregard the separate personality of a company for justifiable reasons.

Required:

State FOUR reasons for which the Court would lift a company’s veil of incorporation.

(4 Marks)

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  • 20 Marks

BL – Nov 2024 – L1 – Q3 – Partnership Elements and Fraud Offences

State elements of valid partnership; fraud-related offences; explain e-contract and digital signature; seller's rights against goods.

a. Certain rules determine whether a partnership exists or not. Required: State the elements of a valid partnership.                             b. “The Criminal Code … has not created a single general offence known as fraud but has created a number of offences that are fraud related”. Required: State FOUR fraud related offences.                                                                                                                                  c. E-contract enhances the ease of doing business. Required: Explain the following:                                                                                          i. e-contract;                                                                                                                                                                                                                        ii. Digital signature.                                                                                                                                                                                                         d. A seller of goods has rights not only against the buyer but the goods also. Required: Explain TWO rights of a seller against his goods.

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  • 20 Marks

POBL – JUL 2020 – L1 – Q1 – Business Entities in Ghana

Discuss the veracity of the assertion that the only recognized type of business entity in Ghana is a limited liability company.

Ama Too Known, a second-year law student has the tendency of displaying her knowledge and

her ignorance in the law to her non law undergraduate students. She has just advised Abena who

was to go into business that the only recognized type of business entity in Ghana is a limited

liability company.

Required: Discuss the veracity or otherwise of this assertion by Ama too known.

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  • 22 Marks

STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications

Advise on tax implications of establishing a company, partnership, or sole proprietorship and identify which offers the least tax exposure for an investor.

As a renowned tax consultant, a potential investor in the real estate sector in Ghana is seeking your expert opinion on the tax implications of establishing a company, a partnership or a sole proprietorship and which form of the business organisations gives the least tax exposure for an investor.

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  • 20 Marks

STP – Aug 2018 – L2 – Q4 – Tax Strategies for New Business Formation

Discuss tax implications of establishing a subsidiary, partnership, or branch for Urok Group in Ghana.

(a). The majority shareholder and President of Urok Group of Companies intends to expand his business activities into West Africa. His initial enquiries show that Ghana is a suitable country for his investment. The investor has been informed that there are different tax treatments for the various forms of business organisations in Ghana. As a renowned tax consultant, the investor seeks your expert opinion on the tax implications of establishing following forms of business organisations:

I. A wholly subsidiary company (5 marks)

II. A Partnership (5 marks)

III. A Branch (5 marks)

(b). Which of the above forms of business organisations gives the least tax exposure on the investment Urok Group of Companies intends to make in Ghana.

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  • 20 Marks

POT – Mar 2025 – L2 – Q4- Partnership Taxation

Compute Nmani Pharmacy’s chargeable income for 2023.

a) Three pharmacy students, Abanga, Banzey and Chambas who completed the Tamale Technical University have teamed up to undertake a business venture in the pharmaceutical sector under a Trading Name Nmani Pharmacy. They agreed to share profit and losses in the ratio 3:2:1 for Abanga, Banzey and Chambas respectively. The details provided below relate to the business financial performance for the year 2023.

 

Details GH¢
Sales 663,400
Cost of goods sold:
Opening inventory 150,000
Purchases 300,000
450,000
Closing inventory (120,000)
330,000
Gross profit 333,400
Less expenses:
Staff cost 102,000
Business promotions 58,100
Depreciation 98,200
Electricity and water 53,000
Expired drugs 12,100
Donation 78,000
Rent and rates 15,000
Sundry expenses 50,000
Vehicle running cost 63,000
(529,400)
Net profit 134,000
Tax paid (15,200)
Net profit after tax 118,800

Additional Information:

  1. Staff cost includes monthly stipend allocations to the aged parents of the partners totaling GH¢18,000.
  2. All three Partners are taking care of their aged parents who are more than 60 years.
  3. Business promotions include lunch expenses of the partners amounting to GH¢21,200.
  4. Donations include funeral donation made during the funeral of the mother of the Vice Chancellor of the Tamale Technical University amounting to GH¢20,000.
  5. Sundry expenses include fine amounting to GH¢32,000 imposed by the Food and Drugs Authority for failure to remove some expired drugs from shelves.
  6. The Partners received Withholding Tax Certificates indicating an amount of GH¢15,200 from the Binabaani European Hospital for medical consumables supplied to the hospital.
  7. Capital allowance has been agreed with the Ghana Revenue Authority at GH¢104,200.

Required: i) Compute the chargeable income for Nmani Pharmacy for the 2023 Year of Assessment.

(ii) Compute the net tax payable by each partner for the year 2023.

(b) In line with the provisions of the Income Tax Act, 2015 (Act 896), partnership and limited liability companies in Ghana are taxed in accordance with their residency status in a year of assessment.

Required: State the criteria for the determination of the residency status of partnership and limited liability companies.

(c) All over the world, countries have introduced policies to guarantee income for their hard-working workforce who may go on retirement to enable them to live meaningful lives after retirement. Ghana’s pension system aims to provide personal financial security for employees in their retirement years.

Required: Describe the current pension system in Ghana.

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  • 15 Marks

FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements

Prepare the profit or loss and appropriation account and financial position statement for a partnership at retirement and admission of partners.

Atsu, Baba, and Chawe are in partnership, providing management services, sharing profits in the ratio 5:3:2 after charging annual salaries of GH¢18,000 each. Current accounts are not maintained. On 30 June 2024, Atsu retired.

Dua was admitted on 1 July 2024 to the partnership and is entitled to 30% of the profits of the current partnership, with the balance being shared equally between Baba and Chawe.

The previous partnership trial balance as of 30 June 2024 was as follows:

Description GH¢ GH¢
Capital accounts – Atsu 12,519
Capital accounts – Baba 65,844
Capital accounts – Chawe 33,618
Trade receivables 138,615
Inventories at 1 July 2023 6,000
Operating expenses 419,166
Investment 300
Bank overdraft 33,510
Trade payables 52,218
Revenue 565,296
Total 663,543 663,543

Additional Information:

  1. Inventory remains at GH¢6,000.
  2. Full provision is required for an irrecoverable debt of GH¢3,450.
  3. Adjustments agreed by partners:
    • The investment is to be included at GH¢4,500.
    • Goodwill, which remains in the books, is valued at GH¢72,000.
  4. On 1 July 2024, GH¢30,000 due to Atsu was transferred to Dua. The balance due to Atsu is to be repaid over three years, commencing on 1 July 2024.
  5. Dua introduced cash of GH¢22,500 to the partnership.

Required:
i) Prepare the statement of profit or loss and appropriation account of the previous partnership for the year ended 30 June 2024 and a statement of financial position at that date. (9 marks)
ii) Prepare the statement of financial position for the current partnership as of 1 July 2024. (6 marks)

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  • 15 Marks

AT – Nov 2017 – L3 – Q7 – Tax Implications of Mergers and Acquisitions

Advise on tax implications for Aba Foods merger/acquisition options with Ifedi Foods.

The prevailing economic condition has led to the business cessation of many SMEs. Aba Foods Limited, a well-known food and beverage company in Abia State, faced difficulties in securing long-term loans, preventing the replacement of its outdated equipment and leading to losses. To ensure continuity, the company considered mergers or acquisitions and entered discussions with Chief Egodi of Ifedi Group. Chief Egodi, concerned about the tax implications of potential arrangements, sought advice from your firm, Aliyara & Co., Chartered Accountants.

Required:
Provide a presentation in the form of advice:

(a) Explain the tax implications of Aba Foods Limited merging with Ifedi Foods and Beverage Limited, with Ifedi inheriting all assets and liabilities. (5 Marks)
(b) Explain the tax implications if Ifedi Foods and Beverage Limited is reconstituted to take over Aba Foods’ assets and liabilities. (5 Marks)
(c) Explain the tax implications if Ifedi Foods and Aba Foods enter a Joint Venture or Partnership Agreement. (5 Marks)

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  • 5 Marks

BL – Nov 2020 – L1 – SB – Q6c – Partnership Law

Assess the legality of different partnership arrangements.

Comment on the legality of the following relationships operating as partnerships:

i. A partnership of 16 persons established for charitable purposes
ii. Adex cooperative society consisting of 500 members
iii. Black and Blue law firm consisting of 31 lawyers
iv. Stone Partnership firm comprising Segun aged 28, Tunde aged 17
v. A partnership of volunteers for the purpose of helping persons displaced by flood.

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