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Differences Between Sole Proprietorship, Partnership and Corporation

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Differences Between Sole Proprietorship, Partnership and Corporation by Christopher Carter, Demand Media
A sole proprietorship is a business that has a single owner who is responsible for making decisions for the company. A partnership consists of two or more individuals who share the responsibility of running the company. A corporation is one of the most recognizable business structures and has a separate identity from the owners of the company. One or more owners may participate as shareholders of a corporation.
Formation
A partnership business automatically begins when two or more people decide to go into business. Sole proprietorships begin automatically when a single business owner decides to open a business. There are no documents to file to begin a sole proprietorship or a partnership. However, businesses are required to file articles of incorporation, also known as a certificate of formation, to legally form a corporation in any state. The Company Offices of Jamaica charges a fee, to file Articles of Incorporation. In addition, corporations are required to register where the company intends to make business transactions. This requirement is not imposed on sole proprietorships or partnerships.
Liability
Sole proprietors and partners in a partnership business have unlimited liability for all debts and liabilities that occur while operating the business. This means partners and sole proprietors may lose their homes, cars and other personal assets, if the company's assets are insufficient to cover the company's debts. Corporations provide owners of the company with limited liability protection against business losses and obligations. This means owners of a corporation will not lose their home, if the company goes bankrupt. Owners of a corporation are liable for company debts and obligations up to the extent of their investment in the company.
Taxation

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