One of the cofounders of project repat is no longer with the company, although he retains a small owner - ship stake. what complications might this change have caused if project repat was set up as a partnership rather than a corporation?

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Business

Jaydin Nixon

2 December, 15:36

One of the cofounders of project repat is no longer with the company, although he retains a small owner - ship stake. what complications might this change have caused if project repat was set up as a partnership rather than a corporation?

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Jonathan Bentley · Answer 1

Partnership is a classification of business where all the partners own a stake in the company itself. To make a change in ownership, all partners would have to agree and possibly buy out the outgoing partner. If this did not happen, the outgoing cofounder would still have a say in whatever the company did going forward.

In a corporation, the shareholders own the company and an outgoing cofounder wouldn't be as big of an issue because even though he would have a vote in the direction of the company, his vote would only be one of many other shareholders.