Partnership Essay

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Jessica Belanger Compare and Contrast March 10, 2013 Partnerships Partnerships and corporations differ immensely; in fact, the only similar characteristic between the two forms of business is that they are both owned by more than one person. Besides the registration of the business, partnerships have few requirements to be met; an agreement in the form of something informal such as an oral agreement or a formal written agreement is all a partnership necessitates to begin. The life of a partnership may be noted as a certain amount of time in the agreement; however, if there are no specifications to the life of the corporation, the death, inability to perform specific responsibilities, bankruptcy, if a partner(s) is added or withdrawals; the partnership will automatically terminate and a new agreement must made if the owner(s) would like to continue operating as a partnership. Relinquishing a partnership is simple; Transferring ownership however, is not so simple. Regardless to a new or existing partner; transferring ownership requires approval from the remaining partners. Partners in a partnership are faced with issues that are more risky than those subjected to shareholders of a corporation; unlimited liability being one of them. According to the partnership laws; unlimited liability states that each partner is liable for the debts of the business. Therefore if a business fails and a partner(s) is unable to fulfill their accountabilities the remaining partners are obligated to pay off the debt, taking from their own personal assets; bank accounts, credit, any type of financial loan from a bank or even family and friends, houses, cars etc.; if need be. On the plus side government agencies combine a partnership with its partners, making them as one. This causes that earning of the partnership to be taxed once versus the double taxation of dividends corporations

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