Question

In what ways does a proprietorship differ from a partnership? In what ways does a proprietorship differ from a corporation?

Answer 1

In a proprietorship, there is a single owner of the business and the assets as well as liabilities of the business are not separate from that of the owner. So business liabilities may need to be honored by the proprietor. While in a partnership, the business venture may be co-owned by two or more partners and the assets, liabilities as well as profits could be shared by the partners.

A corporation is a separate legal entity and has its own assets, liabilities and pays taxes as per it's income. The assets, liabilities and income of a corporation is not merged with that of its shareholders as the case for a proprietorship.