An advantage of a corporation is that (1 point)
Responses
the business is subject to little government intervention.
owners have direct and immediate control over daily management of the business.
owners have limited liability for debt. owners have limited liability for debt.
owners pay fewer taxes than owners of other forms of business.
The correct answer is: owners have limited liability for debt.
An advantage of a corporation is that owners have limited liability for debt.
The advantage of a corporation is that owners have limited liability for debt. This means that the personal assets of the owners, such as their homes or personal savings, are typically protected and cannot be used to satisfy the debts or obligations of the corporation. In the event that the corporation fails or accumulates debt, the owners are generally only liable up to the amount they have invested in the company.
To understand this advantage, you can look at the legal structure and characteristics of a corporation. A corporation is a separate legal entity from its owners, known as shareholders. The company is run by a board of directors who make important decisions about the business, and they are accountable to the shareholders. The shareholders, on the other hand, hold shares of the company's stock, representing their ownership stake in the corporation.
Limited liability for debt is a key benefit of a corporation because it allows entrepreneurs and investors to take risks without putting their personal assets at stake. If the corporation faces financial difficulties, the owners are generally not personally responsible for repaying the debts or obligations of the company. This provides a level of protection for the individual owners and encourages investment in the business.
It should be noted that this advantage of limited liability for debt is specific to corporations and not necessarily applicable to other forms of business ownership, such as sole proprietorships or partnerships. In these types of business structures, the owners are personally responsible for the debts and obligations of the business.