- Distinguish basic aspects of partnership formation from those of corporate formation.
- Explain ownership and control in partnerships and in publicly held and closely held corporations.
- Know how partnerships and corporations are taxed.
Let us assume that three people have already formed a partnership to run a bookstore business. Bob has contributed $80,000. Carol has contributed a house in which the business can lawfully operate. Ted has contributed his services; he has been managing the bookstore, and the business is showing a slight profit. A friend has been telling them that they ought to incorporate. What are the major factors they should consider in reaching a decision?