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

Solutions

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.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Define and discuss the corporate form of organization. Include advantages and disadvantages of this organizational form...

Define and discuss the corporate form of organization. Include advantages and disadvantages of this organizational form in your response.

Identify and briefly describe at least 4 key factors in choosing the best form of organization...

Identify and briefly describe at least 4 key factors in choosing the best form of organization for a business. Describe, compare and contrast sole proprietorship, partnerships and corporations and identify the pros and cons of each. Identify at least 2 different forms of partnerships and briefly describe the characteristics of each. Identify at least 3 different forms of corporations and briefly describe the characteristics of each. Terminology Negotiable instruments, endorsements, forgery, creditor, debtor, debt – secured or unsecured, liens, garnishment,...

what is the main tax advantage of the corporate form of organization?

Which of the following is NOT a characteristic of the corporate form of business organization? separate...

Which of the following is NOT a characteristic of the corporate form of business organization? separate legal entity responsible for paying its own income taxes shares are transferable unlimited liability

Discuss the key steps associated with a strategic plan implementation in a healthcare organization.

Discuss the key steps associated with a strategic plan implementation in a healthcare organization. What are some of the challenges to implementation that a governing board may encounter?

What are two main advantages that the corporate form has over partnerships?

In this discussion question you will discuss the corporate form of business organization: What are the...

In this discussion question you will discuss the corporate form of business organization: What are the advantages and disadvantages of the corporate form of business organization? How does the corporate form of organization compare to sole proprietorships and partnerships? What are the advantages and disadvantages of each? If you were to start a business today, which of these forms of business organization would you chose? What would be the single deciding factor that would help you in your decision? Why?

29. One drawback of switching from a partnership to the corporate form of organization is the...

29. One drawback of switching from a partnership to the corporate form of organization is the following: a. It subjects the firm to additional regulations. b. It cannot affect the amount of the firm's operating income that goes to taxes. c. It makes it more difficult for the firm to raise additional capital. d. It makes the firm's investors subject to greater potential personal liabilities. e. It makes it more difficult for the firm's investors to transfer their ownership interests....

4.Which of the following is not a major advantage of a corporate form of organization? Separate...

4.Which of the following is not a major advantage of a corporate form of organization? Separate legal existence. Continuous life. Government regulations. Transferable ownership rights. 5. ABC Corporation issues 1,000 shares of $10 par value common stock at $12 per share. In recording the transaction, credits are made to: Common Stock $10,000 and Paid-in Capital in Excess of Stated Value $2,000. Common Stock $12,000. Common Stock $10,000 and Paid-in Capital in Excess of Par $2,000. Common Stock $10,000 and Retained...

what are the advantages and disadvantages of the sole proprietorship form of organization? Provide specific examples.

Subjects