Choosing a form of organization usually comes down to choosing between a partnership and a corporation . A general partnership can come into existence by operation of law, with no formal papers signed or filed. In the case of a corporation, a shareholder's liability is normally limited to the amount he has invested. In a general partnership, all partners are individually liable for the obligations of the partnership .
Corporations follow the principle of centralized management.
The shareholders participate only by electing the board of directors. In partnerships, management is usually not centralized. In a limited partnership, all general partners have an equal voice unless they otherwise agree, but the limited partners may not participate in management. A limited partnership is dissolved by the withdrawal or death of a general partner, but not a limited partner. The corporation is taxed as a separate entity.