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

Question

Responses

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

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

Two or more members are required to form a corporation.
Two or more members are required to form a corporation.

Decisions are made by a board of directors.

Answer 1

The primary difference between corporations and unincorporated businesses is:

The liability of owners is limited.

In a corporation, shareholders typically 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, such as sole proprietorships and partnerships, often expose the owners to unlimited personal liability.