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If a shareholder dies, then the shares can be transferred to others. The corporation doesn’t have a maturity, it is a separate entity and lasts forever. However, their claims are discharged before the shares of common stockholders at the time of liquidation. Also, preferred stockholders generally do not enjoy voting rights. The dividend rate can be fixed or floating depending upon the terms of the issue. A corporation can issue shares, both common shares, and preferred shares Preferred Shares A preferred share is a share that enjoys priority in receiving dividends compared to common stock.So the owner’s personal assets will not be at risk if the business fails. This restricts the claim of creditors to the business itself. The most important feature of a corporation is that the entity and owners are separate. This is how most of the large organizations are formed. The corporation is the most complex business structure.read more that is tax once charged at a business level and also a personal level. It usually occurs when the same income is taxed both at corporate as well as at the individual level. There is no double taxation Double Taxation Double Taxation is a situation wherein a tax is levied twice on the same source of income. No tax is charged at the partnership level, which means the business doesn’t pay any tax, so the profits are distributed to partners and they pay tax at a personal level.

There is an advantage to the partnership structure. Partnership structure is more time consuming that Sole proprietorship because lots of legal works are involved and it is costly to set.So limited partners don’t have any liability towards the business and the only risk they have is the risk of their capital.

They are not part of the decision committee. General partners are the decision-makers and limited partners act like investors. read more structure comprises both limited and general partners. At least one person acts as a general partner against one limited partner who will have limited liability enjoying the benefits of less stringent tax laws. Limited Partnership Limited Partnership In a limited partnership, two or more individuals form an entity to undertake business activities and share profits.There are mainly two types of partnership structures: Partnership structure is adopted when there are several investors to the business. read more is always high in Sole proprietorship. Default risk Default Risk Default risk is a form of risk that measures the likelihood of not fulfilling obligations, such as principal or interest repayment, and is determined mathematically based on prior commitments, financial conditions, market conditions, liquidity position, and current obligations, among other factors. Raising funding for Sole proprietorship is also tough as the institutions don’t get the confidence to lend money. So any legal proceedings done towards business will affect the owner directly and his personal properties.So the creditors of the business turn out to be the creditor of the owner and any claim that will not be met from the asset of the business will then be recovered from the owner’s personal assets.Having said that, as the business and the person is not a separate entity. It is calculated by multiplying the deductible expense for the current year with the rate of taxation as applicable to the concerned person. The advantage here is that if you have made a loss in the business and in other sources you made a profit, then the loss will be able to reduce the taxable income and you will be able to enjoy tax shield Tax Shield Tax shield is the reduction in the taxable income by way of claiming the deduction allowed for the certain expense such as depreciation on the assets, interest on the debts etc.So the profit generated from the business is clubbed with the individual’s personal income Personal Income Personal income refers to the total earnings of the individuals and households of a nation through multiple sources such as salary, wages, business profits, bonus, investment returns, dividends, rental receipts, employer contribution in provident or pension funds, etc.

In this structure, the business is not a separate legal entity.