Which of the following describes a primary difference between corporations and unincorporated businesses?(1 point)

Responses

The liability of owners is limited.
The liability of owners is limited.

Decisions are made by a board of directors.
Decisions are made by a board of directors.

Shareholders may have to liquidize assets to cover failures of the corporation.
Shareholders may have to liquidize assets to cover failures of the corporation.

Two or more members are required to form a corporation.

1 answer

The primary difference between corporations and unincorporated businesses is that:

The liability of owners is limited.

In corporations, the owners (shareholders) have limited liability, meaning they are not personally responsible for the debts and liabilities of the corporation beyond their investment in shares. In contrast, unincorporated businesses (like sole proprietorships or partnerships) do not provide this limited liability protection, and the owners can be personally liable for business debts.