Corporation vs. Partnership
CORPORATION VS PARTNERSHIP
1. Creation
CORPORATION Created by operation of law; PARTNERSHIP Created by agreement of the parties;
2. Numbers of incorporators
CORPORATION Requires at least 5 incorporators;
PARTNERSHIP Requires at least 2 partners;
3. Commencement of juridical personality
CORPORATION Acquires juridical personality from the date of issuance of the certificate of incorporation by the Securities and Exchange Commission ;PARTNERSHIP Acquires juridical personality form the moment of execution of the contract of partnership
4. Powers
Corporation can exercise only the powers expressly granted by law or implied from those granted or incident to its existence ; Partnership may exercise any power authorized by the partners (provided it is not contrary to law, morals, good customs, public order, public policy)
5. Management
CORPORATION The power to do the business and manage its affairs is vested in the board of directors and trustees ;PARTNERSHIP When management is not agreed upon, every partner is an agent of the partnership
6. Effect of mismanagement
CORPORATION The suit against a member of the board of directors or trustees who mismanages must be in the name of the corporation; PARTNERSHIP A partner as such can sue a co-partner who mismanages
7. Right of succession
CORPORATION Has right of succession
PARTNERSHIP Has nor right of succession
8. Extent of liability to third persons
CORPORATION Stockholders are liable only to the extent of the shares subscribed by them; PARTNERSHIP Partners are liable personally and subsidiarily (sometimes solidarily) for partnership debts to third persons
9. Transferability of interests
CORPORATION Stockholder has generally the right to transfer his shares without prior consent of the other stockholders because a corporation is not based on this principle;
PARTNERSHIP Partner cannot transfer his interest in the partnership so as to make the transferee a partner without the
1. Creation
CORPORATION Created by operation of law; PARTNERSHIP Created by agreement of the parties;
2. Numbers of incorporators
CORPORATION Requires at least 5 incorporators;
PARTNERSHIP Requires at least 2 partners;
3. Commencement of juridical personality
CORPORATION Acquires juridical personality from the date of issuance of the certificate of incorporation by the Securities and Exchange Commission ;PARTNERSHIP Acquires juridical personality form the moment of execution of the contract of partnership
4. Powers
Corporation can exercise only the powers expressly granted by law or implied from those granted or incident to its existence ; Partnership may exercise any power authorized by the partners (provided it is not contrary to law, morals, good customs, public order, public policy)
5. Management
CORPORATION The power to do the business and manage its affairs is vested in the board of directors and trustees ;PARTNERSHIP When management is not agreed upon, every partner is an agent of the partnership
6. Effect of mismanagement
CORPORATION The suit against a member of the board of directors or trustees who mismanages must be in the name of the corporation; PARTNERSHIP A partner as such can sue a co-partner who mismanages
7. Right of succession
CORPORATION Has right of succession
PARTNERSHIP Has nor right of succession
8. Extent of liability to third persons
CORPORATION Stockholders are liable only to the extent of the shares subscribed by them; PARTNERSHIP Partners are liable personally and subsidiarily (sometimes solidarily) for partnership debts to third persons
9. Transferability of interests
CORPORATION Stockholder has generally the right to transfer his shares without prior consent of the other stockholders because a corporation is not based on this principle;
PARTNERSHIP Partner cannot transfer his interest in the partnership so as to make the transferee a partner without the