Question

Identify each of the following characteristics as being an advantage or a disadvantage of the corporate form of business or not applicable to the corporate form of business organization. 1.Separate legal entity 2.Taxable entity resulting in additional taxes 3.Continuous life 4.Unlimited liability of owners 5.Government regulation 6.Separation of ownership and management 7.Ability to acquire capital 8.Ease of transfer of ownership

Answer 1

Answer and Explanation:

The classification of the advantage or disadvantage is as follows

1.Separate legal entity. It is an advantage as in corporation, there is a separate legal entity because it is an artificial person who can be identified by its common seal

2.Taxable entity resulting in additional taxes. It is a disadvantage. As if the company pays more taxes so it reduced the income of the company

3.Continuous life. It is an advantage for the company. As it remains alive whether its members go or not but the company runs forever that represents the unique attribute

4.Unlimited liability of owners. It is not applicable. as if the company is unable to pay its debt than the owner is personally liable for all debts not the company.

5.Government regulation. It is a disadvantage. If the government impose its regulations than the operations of the company may get affected

6.Separation of ownership and management. It is a disadvantage. As in generally, there is a separation of ownership with that of management so that the goals could be different

7.Ability to acquire capital.  It is an advantage. As the company name, the owners could easily acquire the capital due to separate legal entity feature

8.Ease of transfer of ownership.  It is an advantage. In the company, the transfer of ownership could be easily transferable