Question

Differentiate between the various types of enterprises (Corporation, Partnership, Proprietorship). Note the primary characteristics and unique accounting methods required for each type 200 WORDS

Answer 1

Answer:

Sno.	Corporation	Partnership	Proprietorship
1.	Corporation is owned by the shareholders .	Partnership is a business which is owned by two or more persons.	Proprietorship is a business which is solely owned by one person.
2.	The liability of shareholders is limited to the extent of shares	The liability of partners are generally unlimited	The liability of proprietor is unlimited that is in order to pay debts their personal assets can be used.
3.	Management and shareholders are two different people.Shareholders appoint the management /Directors in the general meeting	The Partners have the control on the business and they mutually decide .	The proprietor has the control over management decision since generally proprietor and management is one and the same thing.
4.	Corporation is a complex form of organisation with more formalities	Partnership is not complex form of entity.	Proprietorship is simple form of organisation
5.	For forming the corporation must be in writing that is memorandum of association and article of association are required.	Partnership can be formed orally or in writting.	Proprietorship organisation need not to be in writing.
6.	The dissolution of the corporation is done by formal procedure that is winding up and liquidation process.	It can be dissloved informally.	It can also be dissloved informally.
7.	The corporation and the shareholders are distinct persons.	Partners and partnership are one and the same thing.	Proprietor are one and the same thing.
8.	The accounting is done as per applicable financial reporting framework.	No such particular act to be followed for accounting purpose.	No such particular act to be followed for accounting purpose.
9.	The capital is contributed by the shareholders.	The capital is contributed by the partners as agreed.	The capital is contributed by the soleproprietor.