While their dilemma may appear to be simple or even theoretical yet in reality it is not. In fact it is one of the most important factors to consider in starting a business as it will impact on the extent of your personal liability as the owner or partner or a stockholder. It will also affect the future of your business its survival growth and profitability.
I have seen many well-run partnership businesses with potentials for expansion suddenly closing shop or for sale just because the partners have misunderstanding between and among themselves which had affected business operations.
If you want stability and limited personal liability a corporate set up is good. A corporation is considered as having a personality its own an artificial person with an identity separate and different from its owners who are called the stockholders. As such you as a stockholder are not personally liable for corporate debts. Even if the stockholders quarrel among themselves with some leaving the company yet the corporation will continue to operate.