BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It has limited life
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Liability of the owners is unlimited
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Provides the owners with shared control
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Makes higher profits
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Detailed explanation-1: -Feedback: A company is a separate legal entity and has an indefinite life that isindependent of the shareholders. Shareholders of most companies have limitedliability for the debts of the company and if there is more than one director, thedecision making is usually a shared responsibility.
Detailed explanation-2: -A corporation provides more personal asset liability protection to its owners than any other entity type. For example, if a corporation is sued, the shareholders are not personally responsible for corporate debts or legal obligations – even if the corporation doesn’t have enough money in assets for repayment.
Detailed explanation-3: -An LLC lets you take advantage of the benefits of both the corporation and partnership business structures.
Detailed explanation-4: -Forming a corporation allows you to: Secure your assets. One of the main advantages* that corporations have is that the owners enjoy limited liability protection and are typically not personally responsible for business debts. This means that creditors can’t pursue your home or car to pay business debts.
Detailed explanation-5: -Advantages of incorporation of a company are limited liability, transferable shares, perpetual succession, separate property, the capacity to sue, flexibility and autonomy. Incorporated businesses offer many more advantages over sole proprietorship companies or partnership companies.