Partnerships and Domestic Corporation

In: Business and Management

Submitted By tholland
Words 983
Pages 4
Introduction
“A friendship founded on business is better than a business founded on friendship.” [ (Rockfellar) ] Partnerships are defined as the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business. [ (IRS) ]. There are two different type of partnerships limited, and general. Domestic Corporation is defined as a U.S. corporation doing business in the state in which it is incorporated opposite of foreign corporation [ (Answers.com) ]
Partnerships
John D Rockefeller stated that partnership is “A friendship founded on business is better than a business founded on friendship, but 70% of business partnerships fail (according to Harvard Business School); the fastest way for a business to succeed is to ignore the dynamics between yourself and the other partners. According to the National Center for State Courts, there were a whopping 14,957,085 civil suits filed in 2001 and that number is increasing every year. The shocking statistic is more than $200 billion dollars a year are poured into fending off litigation [ (National Center for State Courts) ]. Partnerships are used to minimize the disadvantages of a sole proprietorship and maximize the advantages of having more than one owner. Most states have a model law governing partnerships based on the uniform partnership act [ (Ferrell, Hirt, & Ferrell, 2009) ]. Partnerships are typically larger than sole proprietorships but smaller than corporations.
There are two basic type of partnership: general partnership and limited partnership. General partnership involves a complete sharing in the management of a business. General partnerships each partner has unlimited liability for the debts of the business [ (Ferrell, Hirt, & Ferrell, 2009) ]. Limited…...

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