What is the difference between a corporation and a partnership?

A corporation and partnership are two types of business structures with different characteristics. A corporation is an independent legal entity owned by shareholders. This means shareholders have limited liability, meaning they can only lose up to the amount they’ve invested in the corporation. Corporations can also own other businesses, and they have a relatively permanent existence. A partnership, on the other hand, is an agreement between two or more individuals to carry on a business. In a partnership, each owner is personally responsible for any liability or debts that the partnership may take on. Partnerships do not have a permanent existence and can be dissolved with the agreement of all partners. They typically require all partners to contribute capital, labor, and skill to the business. In Texas, both corporations and partnerships fall under the Texas Business Organizations Code. This code sets forth detailed guidelines for the formation, operation, and dissolution of both types of business entities. In addition, both corporations and partnerships are subject to federal income tax; however, the Internal Revenue Code contains different sets of rules for corporations and partnerships.

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What is the difference between a corporation and a partnership?

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