What is the difference between a partnership and a corporation?

The difference between a partnership and a corporation in South Carolina is significant. A partnership is two or more individuals who join forces to conduct business. By entering into a partnership agreement, each partner is responsible for the actions of all the other partners. Profits and losses from the business are shared equally among the partners, so each partner is responsible for their own share of taxes on their business income. In contrast, a corporation is a separate legal entity from the owners. In South Carolina, a corporation is created when a business files documents known as Articles of Incorporation with the Secretary of State. A corporation is its own legal entity and its owners are not personally liable for the actions of the business or any debts. The income from a corporation is taxed separately from its owners, so each owner is only liable for their personal taxes on any profits they receive from the corporation. Both partnerships and corporations have their advantages and disadvantages. Partnerships are simpler to form but can also have greater personal legal liability for the partners, while corporations offer limited liability but require more paperwork and complexity. Ultimately, it is important for a business owner to understand the differences between these two types of business formation when making a decision about how to legally structure their business.

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What is the difference between a partnership and a corporation?

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