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21 February, 14:34

Which of the following is an advantage of the corporate form of business when compared to sole proprietorships and partnerships?

a. Ease of formation

b. Lower taxes

c. Simplified paperwork

d. Limited liability of owners

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Answers (1)
  1. 21 February, 16:36
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    D. Limited Partnership

    Explanation:

    Sole proprietorship is business owned, run & managed by single owner. Partnership is a business owned, run & managed by small group of people - deciding to share its profits.

    Entrepreneurs in these have Unlimited Liability on personal assets, in case business assets are insufficient to settle business liabilities.

    Corporation is a separate legal entity, distinct from its huge group of owners, guided by a board of directors. In case of any claim / sue case : it is against corporate entity & not the people, so they don't have any unlimited liability risk on personal assets to fulfil company's claims.
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