In: Accounting
Compare and contrast corporations and partnerships?
Corporation | Partnership |
A legal entity seperate from its owners | Partnership does not have legal existence. |
It is owned by the stock holders | It is owned by the partners. |
It is formed under state laws with an MOA and AOA | It is formed by an agreement between the partners. |
Its ownership and management is different. | It is managed by the partners. |
It can raise money from general public by shares issue. | It cannot raise money from public. |
The liability of stock holders is limited to their share in the corporation. | The liability of partners is unlimited. |
Corporation will have a common seal as its signature. | Partnership does not have a common seal. |
Corporation should be dissolved only by the stockholders approval or if necessary governments approval. | Partnership can be dissolved by the mutual decision of partners. |
Corporation has to pay taxes as a seperate individual. | A Partnership does not pay taxes. |