What is the Difference Between a Partnership and a Corporation?

A partnership enterprise is a for-profit organization in which partners sign a partnership agreement, jointly fund, operate together, share revenue, share risks, and assume unlimited joint and several liability for corporate debt. Partnerships are divided into general partnerships and limited partnerships.

Partnership

A partnership enterprise refers to natural persons, legal persons and other organizations in accordance with the "

Partnerships are divided into:

1. Life is limited. Partnerships are easier to set up and dissolve. Partner signed

In order to avoid economic disputes, partners should first enter into

Partnerships have the following basic characteristics:

1. A partnership business consists of partners

2. The partnership enterprise uses the partnership agreement as its legal basis

3. The internal relationship of a partnership is a partnership

4.General partners assume unlimited joint and several liability for corporate debt

When a partnership is dissolved, the order of settlement of the property of the partnership:

1. Salaries and labor insurance expenses owed by a partnership enterprise

2. Taxes owed by partnerships

3. Debts of partnerships

4.Return the capital contribution of partners

If the property of the partnership still remains after the settlement in the above order,

(1) There are two or more partners who are all under unlimited liability according to law:

(2) Have a written partnership agreement:

(3) Capital contributions actually paid by each partner:

(4) Name of the partnership:

(5) There are necessary conditions for operating places and engaging in partnership operations. ^[3]

(1) Application for establishment registration signed by all partners:

(2) Identification of all partners:

(3) Power of attorney designated by all partners or jointly authorized agents:

(4) Partnership agreement: The partnership agreement shall specify the following matters:

1. The name of the partnership and the location of its main place of business:

2. The purpose of the partnership and the business scope of the partnership:

3. Name and address of partner:

4.Partners' method and amount of investment and the period of payment:

5. Profit distribution and loss sharing methods:

6. Execution of partnership business:

7. Occupation and retirement:

8. Dissolution and liquidation of partnership:

9. Liability for breach of contract.

10. Settlement of disputes between partners and partners during the operation period.

(5) Certificate of ownership of capital contribution:

(6) Certificate of business place:

(7) Other documents required by the State Council's administrative department for industry and commerce.

(8) Where the establishment of a partnership enterprise is required by laws and administrative laws, the relevant approval documents shall also be submitted. ^[3]

In order to avoid economic disputes, when a partnership is established, partners should first enter into a partnership agreement (also known as a partnership contract, or partnership charter), which has the same nature as the company's charter and has legal effect for all partners, and generally includes the following:

1. The name (or font size), location and address of the partnership;

2. Partner name and home address;

3. The operation of the partnership and the set duration;

4. Date of establishment of the partnership;

5. Rights and obligations of partners;

6. The investment forms of partners and their valuation methods;

7. Provisions for withdrawal and admission of partnership;

8. Principles and ratios of profit and loss distribution;

9. Interest on loans paid to partners;

10. Salaries paid to partners;

11. The capital that each partner can withdraw;

12. The death of the partner and the determination of the rights of the heirs;

13. The settlement date of the partnership and

Legal provisions for cancellation of partnerships

According to the "People's Republic of China Partnership Enterprise Law" ^[2]

Dissolution procedure of partnership

According to the provisions of the State Council, starting from January 1, 2000, sole proprietorships and partnerships will no longer pay

1. When the enterprise is established, it is assumed that two persons A and B are going to set up a handicraft shop together. The partnership contract stipulates that each person's share of capital equals the amount of net assets contributed by the partners.

Borrow: bank deposit

The differences between a registered company and a partnership include the following:

1. The registered company is a legal person with permanent continuity. The partnership is not a legal person and will be dissolved when the partner dies.

2. Registered companies and their members belong to different legal entities, and their rights and obligations are different. Partnerships are interdependent with partners and assets and obligations are communicated.

3. As a legal person, the registered company has independent property and can independently bear responsibility; the partnership does not have independent property, and the property of the partnership is jointly owned by the partners. The partners of an unlimited partnership bear joint and several joint liabilities, and the unlimited partners in a limited partnership bear unlimited liability for partnership debts.

4. The code of action for a registered company is the company's articles of association and articles of association. Those who accept the articles and articles of association can join the company by holding shares and become members of the company. Except for directors and managers, members of the company have no operating rights. The partners are connected through a partnership contract. A third party cannot join the partnership without the consent of each partner. Each partner (except the limited partners in a limited partnership) can conduct business on behalf of the partnership and other partners.

5. Changes in the members of a registered company generally do not affect the company's existence, but the existence and change of members of an unlimited partnership or an unlimited partner in a limited partnership will lead to the dissolution of the partnership.

6. The shareholders of the registered company have no obligation to keep trade secrets or to prohibit competition, nor are they responsible for absolute integrity. Partners should be loyal to each other;

7. Responsible debts of a registered company can only be recovered from the company, and its rights can only be enforced by the company. Each partner of a partnership enterprise may directly recover the debts of the partnership by the creditor.

8. A member or shareholder of a registered company shall not be regarded as an agent of the company and shall not restrain the company due to its actions. Partners can contract with outsiders at any time in the name of a partnership to borrow debts.

9. The goodwill of the registered company belongs to the company, and members of the company must not embezzle it or use it illegally. The goodwill of a partnership is shared by the partners. After the partners are dismantled, they may each use the original partnership name.

10 Registered companies include companies that are not for profit, and partnerships must be for profit. Several persons who are not for profit can form another union of unincorporated groups, but they cannot form a partnership.

11. The organizational form of a registered company is specified in the Company Regulations, and the organizational form of a partnership is relatively flexible. As long as it does not violate the law, the partners can decide by agreement.

What is the Difference Between a Partnership and a Corporation?

Partnership

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