If the members of a partnership wish to admit a new partner, every existing partner must agree to admit the new person. In effect, any one partner can veto the wishes of the majority in any major partnership decision. A corporation has a perpetual life. A partnership continues only so long as specified in the partnership agreement or until the death, bankruptcy, withdrawal, or expulsion of a partner. In the absence of such a restriction, share ownership can be changed easily, merely by the transfer or sale of the shares.
Corporations can raise capital by simply selling new stock, bonds, or other securities.
Partnerships, on the other hand, must obtain a loan, new partners, contributions by current partners, or restriction of the partnership. Tax Aspects One of the chief drawbacks of the corporation form is that its profits are taxed twice. Then, when those profits are distributed to shareholders as dividends, they are taxed as income in the shareholders' hands. This undesirable result can be avoided if a corporation elects to be an S corporation. If the election is made, the corporation will not be treated as a taxable entity.