Which of the following could explain why a business might choose to operate as a corporation rather than as a sole proprietorship or a partnership? a. Corporations generally face fewer reporting and filing regulations b. Corporations have a limited life c. Corporate investors are exposed to unlimited liability d. Corporations generally find it easier to raise capital

Question

Marcelo Castaneda

Business

28 December, 11:05

Which of the following could explain why a business might choose to operate as a corporation rather than as a sole proprietorship or a partnership? a. Corporations generally face fewer reporting and filing regulations b. Corporations have a limited life c. Corporate investors are exposed to unlimited liability d. Corporations generally find it easier to raise capital

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Answers (1)

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Levi · Answer 1

d. Corporations generally find it easier to raise capital

Explanation:

A corporation is a separate and independent legal entity from its owners. A distinctive feature of a corporation is the limited liability enjoyed by its owners or shareholders. A corporation's life is not limited. Most corporations outlive their founders and will continue existing until they are liquidated.

Corporations enjoy the ability to raise capital with much ease compared to other forms of business. Should a corporation require capital, it can raise money through the financial markets. It can offer more shares through an Initial Public Offer or issue a corporate bond to willing investors.