8
QuizMultiple Choice

Business Structures — Quiz

Question 8 • Personal Finance and Economics

The main advantage that corporations have is

Answer
A
being inexpensive and easy to establish.
B
requiring fewer state and federal regulations.
C
giving many owners a say in business decisions.
D
limiting liability for owners and stockholders.

Explanation

A corporation is a separate legal entity, so its owners and stockholders generally are not personally responsible for the corporation’s debts. Their potential loss is usually limited to what they invested. This advantage is called limited liability; corporations are often more regulated and costly to establish than other business forms.

AI-written and checked against the verified answer.

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