As a corporation represents a legal entity, it does not suffer from frailties of human beings – for example, it cannot die by itself, but only because somebody has made efforts to put an end to its existence. A partnership can be terminated if a partner dies, but, in contrast, the death of a shareholder, even the shareholder who possesses and controls a considerable percentage of the shares, will not effect either the very existence or the normal operation of a corporation. For example, if two people were carrying on a partnership business and both were killed in a traffic accident or a plane crash – the partnership would automatically be dissolved. In contrast, if two people formed a corporation together with each possessing 50% of the shares and both died, the corporation would still continue to exist. The shares would be considered the deceaseds’ estates and the heirs would become the new shareholders. The succession of shares guarantees the survival of a corporate business.

In a partnership, partners are responsible for each other’s actions and equally participate in a complex process of the partnerships management – meaning that any serious business decision requires the involvement and consent of all partners. In a corporation, shareholders do not have similar responsibilities and the shares can be transferred at will without reference to other shareholders. This free transferability is a very attractive feature of corporations, however, some non-distributing corporations now put restrictions on share transfers as a measure of control, which may be written in the provisions or shareholders’ agreements.

Although the death of a shareholder does not lead to the death of a corporation, the latter still can be dissolved due to a number of causes. When a corporation goes through the process of bankruptcy and cannot repay its debts, it will be terminated by operation of law. Similarly, the court decision can dissolve a corporation where it deems it proper to do so. The shareholders themselves can vote to bring the corporation to an end when they feel it is appropriate. But the more common way is for the corporation simply to fail to file the required annual reports – in such a case, it will eventually be considered inactive and removed from the registry. It still can be restored if the missing reports are filled and submitted post-factum.