Question

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

Answer 1

A corporation is a form of organisation, which has a distinct identity which is independent of it's owners. The assets and liabilities of the organisation is independent of it's owners. The  owners of a corporation are called the shareholders.

Advantages of a corporation :

• A corporation has a separate legal identity independent of it's owners.
• The shareholders of a corporation has limited liability that is, they are not personally liable for the organisation debts and wrongful acts.
• An organisation has a perpetual life. This means investors don't have to worry about the untimely demise of the owners.

Disadvantages:

• Building up a corporation is expensive and not cheap and easy to operate.
• They require to file the articles of association and prepare annual reports at the end of financial year.they also have to file corporate income tax.
• They have to organiSe board meting and annual shareholder meets, which are costly.