Question

What are the primary advantages of forming a corporation? Select all that apply.

Corporations are inexpensive and easy to set up.
Corporations are not required to register with state governments and the federal government.
It is easier to raise large amounts of capital.
Owners are not personally liable for corporations’ debts.
Corporations do not have to pay business taxes.

Answer 1

- It is easier to raise large amounts of capital.
- Owners are not personally liable for corporations’ debts.

Brief explanation: Corporations can sell stock and attract investors, and they provide limited liability so shareholders’ losses are generally limited to their investments (subject to exceptions like piercing the corporate veil). The other statements are incorrect.