Choosing a business organizational form that limits its owners' liability can affect the firm's ability to raise outside capital.

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This is because potential investors may be less willing to invest in a business with limited liability because they may not have as much control over the decision-making process and may not be fully protected in the event of a lawsuit or debt default. As a result, businesses that choose a limited liability organizational form may have to rely more heavily on their own resources or alternative sources of financing to raise capital.

Choosing a Business Organizational Form That Limits Its Owners' Liability