ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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no personal liability
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limited start-up costs
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equal sharing of profits
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ability to pass the business on to children
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Detailed explanation-1: -Corporations can make a profit, be taxed, and can be held legally liable. Corporations offer the strongest protection to its owners from personal liability, but the cost to form a corporation is higher than other structures.
Detailed explanation-2: -There are several advantages to becoming a corporation, including the limited personal liability, easy transfer of ownership, business continuity, better access to capital and (depending on the corporation structure) occasional tax benefits.
Detailed explanation-3: -Incorporating your business is one of the best ways you can protect your personal assets. A corporation can own property, carry on business, incur liabilities, and sue or be sued. As a separate legal entity, a corporation is responsible for its own debts.
Detailed explanation-4: -Advantages: Stockholders are not liable for corporate debts. This is the most important attribute of a corporation. In a sole proprietorship and partnership, the owners are personally responsible for the debts of the business.
Detailed explanation-5: -One of the biggest differences between the two structures is the amount of legal protection that’s provided. A corporation would offer the highest level of protection, as all owners would have limited liability. In a partnership, at least one owner would typically have unlimited liability.