We first examined the advantages and disadvantages of a general and a limited partnership . I discussed the issue of unlimited liability for a general partnership and addressed how in a limited partnership , an investor can act as limited partner and limit his exposure to the amount of his investment. We further discussed tax implications of both forms. I then began instruction on corporations. I explained how a corporation is a legal fiction separate from its shareholders. We discussed how shareholders are generally not personally liable for a corporation's contractual obligations but still remain liable for their own torts. I further addressed how a corporation can exist in perpetuity as opposed to a partnership.