William Smith is a sole proprietor of a successful business. He is interested in incorporating to protect his personal assets. Which advantage of incorporation is most applicable? What are other advantages of organizing as a corporate entity?
What will be an ideal response
Stockholders are not personally liable for the debts of the corporation. Other advantages of the corporate entity form include the following:
†¢ Stockholders cannot bind the business to a contract; lack of mutual agency
†¢ Indefinite life
†¢ Can raise more money than sole proprietorships and partnerships
†¢ Transfer of ownership easy
†¢ No personal liability for corporation debts for owners (stockholders)
†¢ Limited liability for corporation debts for stockholders
You might also like to view...
Which of the following is not a term a court will supply if it is missing in the contract?
a. Price of the goods b. Time for performance c. Quantity of goods purchased d. The court will supply all the above if they are missing in a contract governed by the Code.
Interoffice memos have two purposes. What are they?
What will be an ideal response?