A major advantage of the corporation relative to other forms of business organization is

Expert Solution

Answer: The correct answer to the given question (blank) is Limited OwnersLiability.

Reason:

In a sole proprietorship firm or partnership form of business organization, there is unlimited liability in the name of the owner. Which means, in case the firm can not repay its debt and if it's sued in the court of law, then, the owners must have to pay their debts out of their own (personal) assets, in case the firm's assets are not sufficient to repay the debts.

On the other hand, in the corporation form of business organization, the owner's liability is restricted (limited) to the extent of the amount which they have invested in the business, they need not worry about selling their personal assets to repay the company's debts, in case of default.

Example: Assume that the owner/s have invested a total of $ 400,000 in the corporation and raised an additional sum of $ 500,000 through the external debt. Now, assume that this corporation defaults in the eye of law, then, the owner's liability is limited only up to the extent of $ 400,000.

keosha answered 21 hours ago

① What are the three major forms of business organization?

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