Question

Identify the six organizational structures available to CPA firms. Why are most CPA firms not organized as general partnerships?

Answer 1

The six organizational structures available to CPA firms are sole proprietorships, partnerships, franchises, corporations, LLCs, and S corporations. Most CPA firms are not organized as general partnerships because of complications and conflicts in sharing profits among multiple owners.

Step-by-step explanation:

The six organizational structures available to CPA firms are sole proprietorships, partnerships, franchises, corporations, Limited Liability Companies (LLCs), and S corporations. Most CPA firms are not organized as general partnerships because general partnerships involve sharing profits among multiple owners, which can create complications and conflicts. Instead, CPA firms often choose structures like corporations or LLCs, which provide limited liability protection and allow for easier transfer of ownership.