According to Rafael M. Lopez Jr. (Partnership and corporations,2012-2013) an association of two or more persons engaged in a business enterprise in which the profits and losses are shared proportionally. The legal definition of a partnership is generally stated as "an association of two or more persons to carry on as co-owners a business for profit"
According to Yaacob, Z., Ismail (The basic aspect of partnership accounting,2009) “A partnership is an association of two or more people who agree to share in the profits and losses of a ...view middle of the document...
A corporation is treated as a “person” with most of the rights and obligations of a real person. A corporation is not allowed to hold public office or vote, but it does pay income taxes. It may be established as a profit making or nonprofit organization and may be publicly or privately held. The stock of a public company is traded on a stock exchange. There may be thousands, even millions, of stockholders in a public company. Stock of a privately held company is not traded on an exchange and there are usually only a small number of stockholders.
According to Bruce K Benesh (Partnership And S Corporation: Tax Planning Guide,1989) The most common form of business organization, and one which is chartered by a state and given many legal rights as an entity separate from its owners. This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern. The process of becoming a corporation, call incorporation, gives the company separate legal standing from its owners and protects those owners from being personally liable in the event that the company is sued (a condition known as limited liability). Incorporation also provides companies with a more flexible way to manage their ownership structure. In addition, there are different tax implications for corporations, although these can be both advantageous and disadvantageous. In these respects, corporations differ from sole proprietorships and limited partnerships.
Differences of Partnership and Corporation
( The Law On Partnerships And Private Corporations
by Hector S. De Leon ,1984 )
Two of the most basic forms of business ownership are partnerships and corporations. Both business organizations have notable similarities and differences. Likewise, a common denominator between the two business organizations is the fact that both are owned by a number of people.
Apart from the structure of ownership, there isn’t any other major similarity between a partnership and a corporation. Thus, the following are some of the most common differences between a partnership and a corporation, each play a pivotal role that could determine the viability and managerial policies of the business firm.
Under regulatory laws, a corporation has limited liability over its creditors while partnerships can be liable up to the extent of their personal property. In most instances, a shareholder can only lose the amount of resources that he invested into the firm. On the contrary, partners are oblige to pay creditors even after the dissolution of the partnership.
Forming a corporation is quite complicated compared to forming a partnership....