Corporations are at a disadvantage relative to partnerships because they have to file more reports to state and federal agencies, including the Securities and Exchange Administration, even if they are not publicly owned.

In a regular partnership, liability for the firm's debts is limited to the amount a particular partner has invested in the business.

A fast-growth company would be more likely to set up as a partnership for its business organization than would a slow-growth company.

Partnerships have difficulty attracting capital in part because of their unlimited liability, the lack of impermanence of the organization, and difficulty in transferring ownership.

A major disadvantage of a partnership relative to a corporation as a form of business organization is the high cost and practical difficulty of its formation.