Corporation in any way is far better than a partnership. Apart from the smaller aspect attributes of corporations, partnerships, are in several ways cannot fulfill the financial needs in running the organization. Shareholders who are not liable for the organization debts usually own corporations, while the partnerships have their owners responsible for business debts. The law allows the creditors even to access the owner’s bank account and personal properties to settle the deficit, which is not in the case of corporations (Guinnane 7).
More importantly, revenue on the income statement and cash flow favors the corporations in several ways. Earnings from partnership businesses are directly subjected to taxes that greatly affect the earned revenue in a fiscal year. Differently, corporations only work out the earned gross profits during the fiscal year, which is then subjected to tax. Ideally, this helps the corporations make savings from the taxable income, which greatly contributes to high incomes (Guinnane 12).
Despite the corporation having attributed advantage of the continuity of life, a major subject rotates around revenue and finance in relation to the partnership business. The corporations have range of business financers, while the partnership businesses are only exposed to minimal financial creditors (Guinnane 6). In the first instance, the corporations are usually engaged in the sale of shares to raise finance for their investment. The trading in stock enables corporation to raise revenue that can be invested in various business activities that accrue dividends to the shareholders. Moreover, even though, the partnerships are not engaged in payment of insurance covers, it makes corporations stronger since the insurance companies secure any business venture that they make (Guinnane 15).
Works Cited
Guinnane, Timothy. Putting the Corporation in Its Place. Cambridge, Mass: National Bureau of Economic Research, 2007. Print.
