Maxwell Macmillan International
A partnership is created by mere agreement of the parties, being a consensual contract and hence, the approval of the State is not necessary while a limited partnership is formed or created by two or more persons having as members one or more general partners and one or more limited partners who are only liable to the extent of the capital contributed by him for the contracts and obligations of the limited partnership.
On the other hand, in order to form a corporation, something more is needed than mere agreement of the incorporators. It is necessary to obtain special authority from the state in order to incorporate and to be recognized as a legal entity. Thus, a corporation is created by operation of law.
In terms management, the business and operations of a corporation is conducted by or vested in a board of directors or trustees (except in a close corporation) such that a stockholder in his individual capacity or any number of stockholder cannot bind the corporation in its corporate capacity. On the other hand, each partner or member can act for the partnership. The general rule is that each partner is an agent of the partnership and his acts and
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In terms of its duration, a partnership (including a limited partnership) may exist indefinitely under the articles of partnership which is known as a partnership at will. A corporation, on the other hand, can exist only for the years or period as provided by law which is usually not more than 50 years although extendible for another 50 years in any one instance.
The law on bankruptcy assists a debtor who may not be able to pay his creditors to provide an order of priority in the payment of debts by dividing the debtor’s assets to his creditors. The law on bankruptcy is a federal law provided in Title 11 of the United States Code. I will advise Mr. Trump that pursuant to Section 507 of the United States Code, the following expenses and claims have priority in the following order:
- $25,000 to an ex-wife in back alimony and child support – as allowed unsecured claims for domestic support obligations under Section 507 (a)(1)(A)
- $20,000 in student loans – as allowed unsecured claims for domestic support obligations under Section 507 (a)(1)(A)
- $100,000 to First Bank For a new Alfa Romeo sports car – unsecured claims allowed under section 502 (f) of this title under Section 507 (a)(3)
- $50,000 to an ex-girlfriend resulting from a lawsuit wherein she sued him for assaulting her – as allowed claims for death or personal injury under Section 507 (a)(10)
Hirschel, S. (1998). Business Law. New York: Maxwell Macmillan International.
United States Code, Title 11