GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Sole Propriotorship
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Partnership
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Corporation
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None of the above
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Detailed explanation-1: -Benefits of a company Limited liability-The company is its own legal entity, so the liability of members or owners is limited. Generally, members will not be personally liable for the debts of the company in their capacity as a member.
Detailed explanation-2: -Corporations offer more flexibility when it comes to their excess profits. Whereas all income in an LLC flows through to the members, an S corporation is allowed to pass income and losses to its shareholders, who report taxes on an individual tax return at ordinary levels.
Detailed explanation-3: -Easier ownership transfers A corporation is a separate legal entity, and owners do not own its assets directly. Instead, they own shares in the corporation, which in turn owns the assets. This makes transferring ownership interests much easier. This ability to transfer ownership makes it easier to attract investments.