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Unformatted text preview: porated.
• Partnership: two or more owners, controlled apart from the partners personal interests but not
a separate legal entity, is not incorporated.
• Corporation: a business unit that is granted a state charter and is recognized as a separate legal
entity, owners are stockholders but do not generally run the day to day operations
Comparative Features of the Forms of Business Organizations
Sole Proprietorship Partnership Corporation Not a separate entity Not a separate
entity Separate entity Risk of ownership Owner's personal
resources at stake Partner's
stake Limited to
the corporation Duration of life Limited by choice or
death of owner Limited by
choice or death
of any partner Indefinite life Transferability of
Ownership Sale of owner
establishes a new
company Changes in any
partnership Transferable by
sale of stock; no
impact on the
books Accounting treatment Separate Separate Separate Legal status Types of Business Activities: Operating Activities: Includes all cash inflows and outflows related to the normal operations of
a business (Ex. Selling g...
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