They are only involved in the company to the extent of their investment in it, and they cannot take part in managing the company. The legal requirements of a partnership are fairly complex. It is a good idea to talk to a lawyer, and formalize the agreements in writing if you are thinking about entering a partnership. Corporation A Corporation is more expensive to start, and it has detailed legal requirements. Despite this, it is the dominant form of organization in the modern business world.
Most big businesses are corporations, and many small businesses also choose to incorporate.
There are two main reasons why corporations are so popular. The first is that the corporation is a separate entity from the shareholders. This means that the shareholders are not personally liable for the debts of the company. There are also certain tax advantages available to corporations. The laws regarding corporations are very complex.