1,415
7
Essay, 2 pages (300 words)

Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability

The three main forms of creating a business are sole ownership, partnership, and corporations. Corporations are one of the most popular forms of structuring a business due to a variety of advantages associated with this arrangement. One of the greatest virtues of the corporate arrangement is that is provides its owners limited liability. Limited liability means that if the business goes six feet under and fails the owners of the corporation are not personally liable for the debt that is left behind (Allbusiness, 2011). Under other business structures such as sole ownership the owners have to pay for the entire debt that the business leaves behind. The reason that corporations are able to offer limited liability is because a corporation is considered a separate legal entity (Weygand & Kieso & Kimmel, 2002). Choosing the corporation over other types of business structures has other advantages. The corporation is the best business structure for entrepreneurs that are looking to raise capital. The way that the corporation allows its owners to raise large sums of capital in shorts amounts of time is through the sale of common stocks. In order for a corporation to sell common stocks it must become a public corporation registered in the Securities and Exchange Commission (SEC). Once a corporation becomes public its common stocks become a very liquid asset that is traded in open markets such as the New York Stock Exchange (NYSE) or in the over the counter market known as NASDAQ. Choosing the corporate form can also help managers obtain better benefits from governmental institutions in the form of incentives. One of the main disadvantages of the corporate form is double taxation. References Allbusiness. com (2011). Advantages and Disadvantages of Owning a Corporation. Retrieved June 28, 2011 from http://www. allbusiness. com/business-planning/business-structures-corporations/686-1. html Weygandt, J., Kieso, D., Kimmel (2002). Accounting Principles (6th ed.). New York: John Wiley & Sons.

Thank's for Your Vote!
Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability. Page 1
Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability. Page 2
Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability. Page 3

This work, titled "Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability" was written and willingly shared by a fellow student. This sample can be utilized as a research and reference resource to aid in the writing of your own work. Any use of the work that does not include an appropriate citation is banned.

If you are the owner of this work and don’t want it to be published on AssignBuster, request its removal.

Request Removal
Cite this Essay

References

AssignBuster. (2022) 'Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability'. 28 September.

Reference

AssignBuster. (2022, September 28). Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability. Retrieved from https://assignbuster.com/analyze-the-advantages-and-disadvantages-of-in-corporating-a-business-and-concept-of-limited-liability/

References

AssignBuster. 2022. "Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability." September 28, 2022. https://assignbuster.com/analyze-the-advantages-and-disadvantages-of-in-corporating-a-business-and-concept-of-limited-liability/.

1. AssignBuster. "Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability." September 28, 2022. https://assignbuster.com/analyze-the-advantages-and-disadvantages-of-in-corporating-a-business-and-concept-of-limited-liability/.


Bibliography


AssignBuster. "Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability." September 28, 2022. https://assignbuster.com/analyze-the-advantages-and-disadvantages-of-in-corporating-a-business-and-concept-of-limited-liability/.

Work Cited

"Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability." AssignBuster, 28 Sept. 2022, assignbuster.com/analyze-the-advantages-and-disadvantages-of-in-corporating-a-business-and-concept-of-limited-liability/.

Get in Touch

Please, let us know if you have any ideas on improving Analyze the advantages and disadvantages of in corporating a business., and concept of limited liability, or our service. We will be happy to hear what you think: [email protected]