Respuesta :
The correct answer C: Reduced legal liability for investors. This means Corporation stockholders are not personally responsible for the obligations of the company.
Compared to partnerships and sole proprietorships, corporations have various benefits. The owners of a sole proprietorship or partnership are individually liable for the obligations of the company. Creditors may pursue each owner's personal property, such as their homes, bank accounts, and other assets, to make up any shortfall if the sole proprietorship or partnership's assets are unable to cover the obligation. On the other hand, a corporation's owners are typically not held responsible if it runs out of money. Self-employment taxes are levied on profits from a lone proprietorship. With a corporation, these taxes only apply to salaries (and not profits). In contrast to a partnership or a single proprietorship, a corporation's life does not end with the passing of its owners, directors, or executives.
Which is an advantage of corporations relative to partnerships and sole proprietorships?
A. Increased difficulty of raising funds
B. Harder to transfer ownership
C. Reduced legal liability for investors
D. Most common form of organization
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