Business partners Melinda and Joseph are discussing which legal structure to choose for their business. They are leaning toward creating a corporation. What is one advantage of a corporation for these partners?

Question

A. they would have lower set up costs
B. They would follow fewer government regulations
C. They would have protection from personal liability
D. they could set the business up without assistance from a lawyer

Answer 1

C. They would have protection from personal liability

One of the main advantages of forming a corporation is that it provides the owners (shareholders) with limited liability protection. This means that their personal assets are generally protected from the debts and liabilities of the corporation.