GK
BUSINESS ECONOMICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Corporations are owned by only one person
|
|
|
Corporations can sell stock to raise money for the business.
|
|
|
Sole proprietorships have limited liability for the owners.
|
|
|
Sole proprietorships require a legal charter to start the business.
|
Detailed explanation-1: -Corporations have an easier time obtaining outside funding than sole proprietorships. Corporations can sell shares of stock and secure additional funding for growth, while sole proprietors can obtain funds only through their personal accounts, using their personal credit or taking on partners.
Detailed explanation-2: -Incorporation also makes it possible for businesses to raise funds by selling stock. This is a big advantage as a company grows and needs more funds to operate and compete. Depending on its size and financial strength, the corporation also has an advantage over other forms of business in getting bank loans.
Detailed explanation-3: -Since most corporations sell ownership through publicly traded stock, they can easily raise funds by selling stock. This access to funding is a luxury that other entity types don’t have.