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Distinctions Between Partnership and Corporation
PARTNERSHIP
CORPORATION
a. According to the manner of Creation
Partnership becomes established through the simple expediency of an agreement among the members thereof.
A private corporation is created by operational law
b. With respect to Juridical Personality
Juridical personality obtained by the partnership from the moment the agreement among the partners has been reached and the papers for registration filed with the Security and Exchange Commission (SEC)
Private corporation acquires legal personality from the date the certification is issued by the SEC
c. Term of Existence
- a partnership may be stipulated in the articles of agreement by the partners.
-shall not be in excess of fifty years, although such term may be extended prior to its expiration for a like period.
d. Right of succession
it cannot be said to be true of a partnership.
- the right of succession is enjoyed by a private corporation
e. Powers
A partnership can engage in any field of business as the partners may decide provided it is not contrary to law, morals, or public policy.
The operation of a private corporation is limited to what is specifically stipulated in its existence. Hence, if a private corporation is to operate in a particular line of economic activity or business other then what the law authorizes, it must first obtain an amendment to its charter from competent authority.
f. Delectus Personae
the principle of delectus personae prevails. No new members may be admitted into the partnership without the unanimous consent of all partners.
It may admit new stockholders into the corporation without the need of obtaining the prior consent or approval of the other stockholder.
g. Management
Partnership may operate even without a designated manager. In such case, all the general partners of the partnership shall be deemed to act for the partnership.
Private corporation is run by a board of directors. It exercises its powers through the board
h.Liability to third parties
With the exception of limited partners, the members of a partnership are liable jointly (as a group) and severally, meaning individually, for all the liabilities of the business.
One main advantage of private corporation over partnerships is that the stockholders are not liable for over and above what they have subscribed fro shares of stocks.
i. Dissolution
It may be dissolved almost immediately, subject to the expressed will of the partners.
If it is agreed by the stockholders to dissolve the corporation for whatever reason or reasons, such intention shall require the prior consent of the proper government authority.
- general corporation may be dissolved at any time by legislative enactment, as when its charter or franchise is cancelled by the government.
What else can I help you with?
Compare and contrast partnerships and corporations?
compare and contras partnership and corporation
What are kinds of business?
there are three basic kinds of business sole proprietors,partnerships, corporation
What were the advantages of corporation over partnerships why were they good for investors and partners?
Corporations have limited liability.
What financial advantage does a corporation have over sole proprietorships and partnerships?
A corporation is perceived as having substantial revenues where a small business wouldn't be. A corporation can likely get financed quicker than a person who has a small business.
What is the difference between An open corporation and a closed corporation?
An open corporation, also known as a public corporation, allows its shares to be traded publicly on stock exchanges, enabling anyone to buy or sell shares. In contrast, a closed corporation, or private corporation, does not offer its shares to the general public and typically has a limited number of shareholders, often consisting of family members or a small group of investors. This distinction affects their regulatory requirements, reporting obligations, and the level of public scrutiny they face.
What happens to a corporation after a bankruptcy discharge?
Partnerships and corporations must liquidate under state law before or on completion of the proceeding.
What is the advantage of a partnership over a corporation?
One advantage of a partnership over a corporation is that partnerships have simpler and more flexible management structures, allowing partners to make decisions more quickly and easily.
What percentage of businesses in the united states are partnerships?
The vast majority of businesses start out as sole proprietorships or partnerships. A third option is to set up a corporation. In the United States, about 70 percent of all businesses are sole proprietorships, 20 percent are corporations and the remaining 10 percent are partnerships.
What has the author K Geens written?
K. Geens has written: 'Corporations and partnerships in Belgium' -- subject(s): Corporation law, Partnership
What is inter-organizational partnerships?
Inter-organizational partnerships refers to cooperation between different entities or firms. These partnerships may be aimed at making business much easier and successful.
Why is the distinction between insurable and uninsurable risks significant for the theory of profit?
why is the distinction between insurable and uninsurable risks is significant for the theory of profit
Discuss various forms of business organization?
Businesses can be corporations or partnerships. Partnerships are between two people interested in making money. Corporations are entities established to make money, as well, but they have shareholders.
