BUSINESS FORMATS: by rMQDu4g

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									                                       BUSINESS FORMATS:

                A Comparison of Sole Proprietorship, Partnership and Corporation


                    SOLE PROPRIETORSHIP                 PARTNERSHIP             CORPORATION

Definition           An individual doing business         Two or more             A legal person,
                    with a view towards making a        persons doing           created by statute,
                    profit.                             business with a view    for the purpose of
                                                        towards making a        doing business.
                                                        profit.

Governing           no regulatory scheme governs        The Partnership Act     The Business
Legislation         formation                           governs. There is       Corporations Act, the
                                                        some internal           Securities Act, etc...
                                                        regulation.

Liability of        The owner is solely liable to the   The partners are        The corporation is
Owners              full extent of all assets for any   jointly and severally   solely liable...(with
                    debt or obligation arising out of   liable...               certain exceptions)
                    the business.

Taxation            The owner is taxed as an            The partners are        Separate corporate
                    individual - has wider range of     taxed as individuals    tax rates - different
                    potential deductions than           - income flows          rates depending on
                    employees                           through the               nationality of
                                                        partnership to the      corporation
                                                        partners each year      shareholders taxed
                                                                                when dividends are
                                                                                paid

Other Factors                                           - ordinary              - Private vs
                                                        partnerships              public corporations
                                                        - limited               - federal corporations
                                                        partnerships            - directors liability
                                                                                - shareholders rights

								
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