When I was an accountant for IBM, I tried to create a hybrid entry. I called it a nebit. It wasn’t a debit and it wasn’t a credit. It was somewhere in between. It was to be used when either a debit or credit wasn’t exactly right. You could use it when the trial balance didn’t or when you couldn’t find that $.10 you were out of balance. This will probably not come as a surprise but the nebit is not a part of any accounting system today.
If you are looking for an entity that falls between a partnership and a corporation, maybe the Limited Liability Company (LLC) is what you seek. The LLC provides the liability protection of a corporation with the profit sharing flexibility of the partnership. Like the corporation, the LLC is a state law creation. It is formed by filing articles of organization with the appropriate state organization, usually the state secretary of state. The owners of a LLC are called members. Like the corporation, you get to chose, with the IRS, how the LLC is taxed. It can be treated like a partnership or a corporation but you must make the election. If you are a single member LLC, the partnership election is not available. You are either treated as a sole proprietor or a corporation. If you chose corporation, you get to make another election, are you going to be treated as a C Corp or an S Corp.
