Question

the advantages of a corporation compared to a sole proprietorship or partnership include:

Answer 1

ADVANTAGES OF CORPORATION

1) Protection from liability - As a corporate entity, your liability for your actions is limited to the value of the business, but in sole proprietorship/partnership liability can also be paid off from your personal assets

2) Perpetual Life - A corporate entity does not die on death of shareholders, employee or directors but this facility is not available in proprietorship/partnership

3) Getting money from market is easy for corporates - Corporate entity can raise money by various types of stock which may be listed on stock exchanges, hence are trustable but this facility is not available in the case of proprietorship/partnership

4) Selling ownership is easy in corporate entity - in proprietorship/partnership we have to sell each off assets, permits, etc individually but ownership in corporate entity can be sold to third party without disturbing daily routine of entity.

5) Saving in self employed tax - unlike in case of propertership corporate entities do not pay self employment taxes.

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