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What is difference between sole proprietorship, partnership and Corporation?

Answer»
Sole proprietorshipPartnershipCorporation
OwnershipA single ownerTwo or more ownersUsually owned by many shareholders
Profit or lossesAll profits go to the sole ownerProfits split equally, or by pre-determined terms amongst the ownersDividends declared and given to shareholders
LiabilityThe owner has unlimited liabilityUsually split amongst the owners based on the termsLimited liability – individuals are not usually directly liable for activities within the corporation
Decision-makingAll decisions for the firm are made by one ownerOwners in the partnership are responsible for the decisionsBoard of director and shareholders
TaxOwner is taxed on his personal income/profit from the companyOwners are taxed on their respective incomesA corporation is taxed as a “person”


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