Legal Aspects of Business Organizations in Tourism and Hospitality Quiz

Corporation Overview

• A corporation is a separate legal entity that provides limited liability to its owners, also known as shareholders.
• It is considered a legal person, with its own rights and obligations.

Essential Attributes of a Corporation

• Separate legal entity: A corporation exists independently of its owners.
• Limited liability: Shareholders' personal assets are protected from the corporation's debts and liabilities.
• Centralized management: A corporation is managed by a board of directors and officers.
• Continuous existence: A corporation continues to exist even if its owners change.
• Free transferability of ownership: Shares can be easily transferred from one owner to another.

Partnership vs Corporation

• A partnership is a business owned and operated by two or more individuals, whereas a corporation is a separate legal entity.
• In a partnership, owners (partners) have unlimited personal liability, whereas in a corporation, shareholders have limited liability.

Dissolution of a Partnership

• The legal dissolution of a partnership occurs when the partnership is terminated, and its assets are distributed among the partners.
• This can happen due to various reasons, including the death or withdrawal of a partner, or the expiration of the partnership agreement.

Module Purpose

• The main purpose of this module is to introduce the concept of corporations and partnerships, highlighting their key characteristics, advantages, and differences.