Business partners Melinda and Joseph are discussing which legal structure to choose for their

Question

business. They are leaning toward creating a corporation. What is one advantage of a
corporation for these partners?

S point)

○ They would have lower setup costs.

○ They would follow fewer govemment regulations.

◦
They would have protection from personal liability.
○ They could set the business up without assistance from a lawyer.

Answer 1

One advantage of a corporation for Melinda and Joseph is:

◦ They would have protection from personal liability.

In a corporation, the owners (shareholders) typically are not personally liable for the debts and liabilities of the business. This means that if the corporation faces legal issues or financial troubles, their personal assets are generally protected.