Question

What is the primary advantage of a corporation compared to other forms of business ownership?

Answer 1

The primary advantage of a corporation compared to other forms of business ownership is **limited liability**. This means that the owners (shareholders) of the corporation are typically not personally responsible for the corporation's debts or liabilities. Their financial risk is limited to the amount they have invested in the corporation, protecting their personal assets from business creditors. Additionally, corporations can raise capital more easily through the sale of stock, have perpetual existence (not affected by changes in ownership), and may benefit from certain tax advantages and greater credibility in the marketplace.