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Partnerships versus Corporations

15 January, 2016 - 09:36


  1. Distinguish basic aspects of partnership formation from those of corporate formation.
  2. Explain ownership and control in partnerships and in publicly held and closely held corporations.
  3. 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?