What is the main reason almost all large companies are corporations? Corporations are untaxed by state and federal governments, so all profits go to the investors. Corporations are protected from failure by federal law and therefore they provide guaranteed safety and profits for their investors. Corporations can attract millions of dollars of financial capital from many people because the owners have limited liability. By law, after a given period of time or after acquiring substantial size, businesses must become corporations.

Question

Mekhi Sims

History

22 February, 02:56

What is the main reason almost all large companies are corporations? Corporations are untaxed by state and federal governments, so all profits go to the investors. Corporations are protected from failure by federal law and therefore they provide guaranteed safety and profits for their investors. Corporations can attract millions of dollars of financial capital from many people because the owners have limited liability. By law, after a given period of time or after acquiring substantial size, businesses must become corporations.

+2

Answers (1)

Know the Answer?

Edgar Flowers · Answer 1

"Corporations can attract millions of dollars of financial capital from many people because the owners have limited liability" is the correct answer. Without this access to external funding, many companies would cease to exist.