Benefits Of A Corporation Is A Business Separated From Its Owners

827 Words Sep 30th, 2016 4 Pages
Corporation is a business separated from its owners. Corporations can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes. Advantages of a corporation is it is a limited liability that protects owners from losing more than they invest. The business can achieve large sizes due to marketability of stocks. It receives certain tax advantages. Has greater access to financial resources allows growth within the company. Attracts employees with specialized skills which can help the business. Disadvantages of a corporation is double taxation because both cooperate profits and dividends paid to owners are taxed, although the dividends are taxed at a reduced rate. It is more expensive and complex to form a corporation. Government has more regulation in a corporation. Another disadvantage is financial reporting requirements make the operations public. Limited Liability Company (LLC) is a form of a private limited company in the United States. Limited Liability Company is a business that combines the taxation of a partnership or sole proprietorship with the limited liability of a corporation. Advantages of a limited liability company is a limited liability which implies members’ debts and obligations to their own investments. It has pass-through taxation that the income from the business can be treated as their own personal income. Limitless ownership so there is no limit on the amount of owners. Has allocation flexibility so the amount of…

Related Documents