Zach inherited a large amount of money from his uncle. Zach wishes to start a business with his college friend, and his lawyers encourage him to make it a corporation. What is the advantage of forming a corporation instead of a partnership?
A) limited liability
B) ease of start-up and administration
C) pass-through taxation
D) double taxation

Question

Quizplus · Accepted Answer

The advantage of forming a corporation instead of a partnership is limited liability. With a corporation, the owners (shareholders) are not personally liable for the debts and obligations of the business. This means that their personal assets are protected in case the business fails or faces legal action. In contrast, in a partnership, the partners are personally liable for the debts and obligations of the business.

Zach Inherited a Large Amount of Money from His Uncle