An advantage of a corporation is that
a. owners have limited liability for debt.
b. owners have direct and immediate control over daily management of the business.
c. the business is subject to little government intervention.
d. owners pay fewer taxes than owners of other forms of business.
I'm stuck between a and c
To determine the correct answer, let's analyze the advantages of a corporation as mentioned in the options:
a. Owners have limited liability for debt: This means that the personal assets of the owners, also known as shareholders, are protected in case the corporation incurs debts or legal obligations. The liability is limited to the amount of capital investment made by each shareholder, and their personal assets are shielded from being seized to settle corporate debts. This is an advantage of a corporation since it provides a layer of financial protection to the owners.
c. The business is subject to little government intervention: This advantage suggests that a corporation operates with relatively minimal interference or regulation from the government. This allows the corporation to have more autonomy and flexibility in its operations, potentially leading to greater decision-making freedom and adaptability.
Now, let's determine which option is correct:
In this case, the correct answer is a. Owners have limited liability for debt.
The advantage of limited liability is a defining characteristic of corporations and is one of the primary reasons why many entrepreneurs choose to structure their businesses as corporations. It offers significant protection to the owners' personal assets and shields them from being held personally responsible for the corporation's debts. This advantage distinguishes corporations from other forms of business entities like sole proprietorships and partnerships.
On the other hand, option c, stating that the business is subject to little government intervention, is not necessarily an inherent advantage of corporations. The level of government intervention can vary depending on various factors including the industry, jurisdiction, and compliance requirements. While some regulatory requirements may be imposed on corporations, the limited liability aspect is a distinct advantage that is widely associated with corporations.
Therefore, the correct answer is a. Owners have limited liability for debt.