Describe the key advantages associated with the corporate form of organization.

Expert Solution

The advanatges of corporate form of organization are:

(1) Limited liability: The major advantage of corporate form of organization is that it has limited liability of stockholders or shareholders or investors. The liability of stockholders of a company is limited to the amount unpaid on their shares. They are not personally liable for the debts of the company.

(2) Perpetual existence: Another major advantage of the corporate form of business organization is that it has perpetual existence. It means that the company's life is not dependent on the life of its shareholders. company will continue to exist even if its shareholder die.

(3) Transferability of interest: Any shareholder can sell or transfer his or her interest / share in the company to another person easily.

(4) Raising of finance: Since a corporation can issue shares or stock in wider range of markets, so it has the potential to raise huge capital easily.

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