Partnership and Corporation Business Entities

Full Video Transcript

Partnerships and Corporations are two forms of business organizations. A partnership is an association of two or more persons, and unless it is a limited partnership, it need not be established in writing. A corporation is a legal entity created in accordance with state law. Incorporation establishes the business as a separate legal entity. Owners of a corporation are not personally liable for the debts of the business unless they waive that protection. Partnerships are less complicated to set up than corporations and may be more favorable to smaller businesses for tax purposes. However, each partner can be held personally responsible for the debts in a partnership, and in the event that one of the partners quits, dies, or declares bankruptcy, the partnership is dissolved. In deciding whether to incorporate, you should contact an attorney to determine what is the best form of business ownership for your situation. That will depend on a variety of factors, such as who will control the affairs of the entity, how much financial risk is involved, the potential for growth, the tax implications, and other matters. For more information regarding partnerships and corporations, contact a qualified attorney.