A legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that an individual possesses; that is, a corporation has the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes.
Advantages
Owners' personal assets are protected from business debt and liability
Corporations have unlimited life extending beyond the illness or death of the owners
Tax free benefits such as insurance, travel, and retirement plan deductions
Transfer of ownership facilitated by sale of stock
Change of ownership need not affect management
Easier to raise capital through sale of stocks and bonds
Disadvantages
More expensive to form than proprietorship or partnerships
More legal formality
More state and federal rules and regulations
Advantages
Owners' personal assets are protected from business debt and liability
Corporations have unlimited life extending beyond the illness or death of the owners
Tax free benefits such as insurance, travel, and retirement plan deductions
Transfer of ownership facilitated by sale of stock
Change of ownership need not affect management
Easier to raise capital through sale of stocks and bonds
Disadvantages
More expensive to form than proprietorship or partnerships
More legal formality
More state and federal rules and regulations
0 comments:
Post a Comment