Question

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

Answer 1

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

Answer 2

The correct answers are C)It is easier to raise large amounts of capital, and D)Owners are not personally liable for corporations’ debts .

A Corporation is defined as a legal entity that is separated from the owner or manager. The advantages of a corporation are a limited liability, an ability to raise more money for investment, permanent life, not difficult ownership transition, and access to capital markets. The disadvantages are elevated initial cost, double taxation, complicated paperwork, and difficult process to terminate the corporation.