which of the following is an advantage of a corporation
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- The following are some of the advantages that a corporation has over other forms of businesses, such as sole proprietorships and partnerships. Limited Liability. The main reason for forming a corporation is to limit the liability of the owners.
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S Corp (S Corporation) Advantages & Disadvantages As a corporation, an S corporation is created through filing Articles of Incorporation with the Secretary of State or similar government body. It issues stock and is governed as a corporation. The owners, who are called shareholders, have the same protection from liability as shareholders of a C corporation.
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- In addition to the limited liability protection enjoyed by shareholders, a corporation offers many other advantages over other types of entities: 1  Ownership interests in the business are freely transferable: 2  Shares of the company may be sold to investors in order to raise capital;
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S Corp (S Corporation) Advantages & Disadvantages The advantages of an S corporation often outweigh any perceived disadvantages. The S corporation structure can be especially beneficial when it comes time to transfer ownership or discontinue the business.These advantages are typically unavailable to sole proprietorships and general partnerships.he advantages of an S corporation often outweigh any perceived disadvantages. The S corporation structure can be especially beneficial when it comes time to transfer ownership or discontinue the business.
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- The popularity of corporations is due to following advantages: 1  The liability of the owners towards the creditors is limited to their investment in the company. 2  The corporation is considered a legal person with perpetual existence. 3  Additional capital can be raised easily through stock markets, etc. 4  The ownership is represented by the number of ...
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- Quick Answer. Consumers derive several key benefits from business competition, including higher quality products, a larger variety of similar products, better prices and greater accessibility in finding products. Companies regularly compete among themselves, hoping to win consumer trust and revenue.
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The Disadvantages of Limited Liability Company A limited liability company, often referred to as a LLC, has many advantages. Because a LLC represents characteristics of a corporation and a partnership combined, a LLC takes on the best of both of these structures of business.
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- Comparative advantage is generated by a firm's ability to produce a good or service at a lower cost than its competitors. This gives the firm the ability sell its goods or services at a lower price than its competition or to generate a larger margin on sales.
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- A comparative advantage gives a company the ability to sell goods and services at a lower price than its competitors and realize stronger sales margins. Topics What's New
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- Large firms in the United States, such as Ford and Microsoft, are almost all organized as corporations. We examine the three different legal forms of business organization—sole proprietorship, partnership, and corporation—to see why this is so. Each form has distinct advantages and disadvantages for the life of the business, the ability of the business to raise cash, and taxes.
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Advantages and Disadvantages of Sole Proprietorships Advantages of a Sole Proprietorship. 1  A sole proprietor has complete control and decision-making power over the business. 2  Sale or transfer can take place at the discretion of the sole proprietor. 3  No corporate tax payments. 4  Minimal legal costs to forming a sole proprietorship. 5  Few formal business requirements.
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Why should students study international business? Q2: What are the primary advantages and disadvantages of exporting? Suggested Answer: One of the primary advantages of exporting is its relatively low level of financial exposure. A second advantage of exporting is related to speed of entry. Exporting allows a firm to expand into a foreign market gradually, and therefore allows a company to assess the local environment and adapt its products to local consumers.
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Advantages and Disadvantages of Sole Proprietorships Advantages of a Sole Proprietorship A sole proprietor has complete control and decision-making power over the business. Sale or transfer can take place at the discretion of the sole proprietor.
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Tax Dictionary S Corporations. S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income at the entity level. To qualify for S corporation status, the corporation must meet the following requirements: Be a domestic corporation; Have only allowable shareholders
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The Advantages of S Corp The Advantages of S Corp. An S corporation is a unique corporate entity created by the rules of the Internal Revenue Code. Operating as an S corporation gives owners of the company legal and taxation benefits.ince an S corporation has a life separate from the owners of the business, the death or retirement of a shareholder will not stop an S corporation from continuing its operations. Other business entities such as a sole proprietorship end automatically if a business owner dies or decides to retire.
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- Benefits of an S Corporation. If your company qualifies for Subchapter S in Florida Corporation status, there are certainly many benefits that you will enjoy. Higher Level of Credibility  Many Florida Subchapter S companies experience higher earnings due to the level of credibility attached to running one.
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- The limited liability company (LLC) is the most popular entity type for small businesses. An LLC combines the personal liability protections of a corporation with the tax flexibility of a partnership. The LLC offers many advantages, including:1  Pass-through taxation. and S corporations are the most common types of corporations in the U.S. and they have a number of advantages. Both types of corporations separate the owners' personal assets from the company's liabilities. C corporations provide unlimited growth potential through the sale of common stock.
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S Corporation An S corporation status is attractive to smaller, family-owned corporations that want to avoid double taxation: a tax on corporate income and a second tax on amounts distributed to shareholders. This status may also make financial sense if a new corporation is likely to have an operating loss in its first year.
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What is the difference between an LLC, a C corporation, and an S corporation? The disadvantage of a C corporation is double taxation: 1  FIRST at the corporate level on the corporation’s net income. 2  SECOND to the shareholders when the profits are distributed, if corporate income is distributed to business owners as dividends.
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Should Your Business Be an LLC or an S Corp? S Corp Pros: 1  The key advantage of an S corp is that it offers tax benefits when it comes to excess profits, known as distributions. 2  The S corp pays its employees a reasonable salary, which means it should be tied to industry norms, while also deducting payroll expenses like federal taxes and FICA.
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Corporations Compared to LLCs The other advantages of LLCs are found in certain tax situations. For example, an LLC can make special allocations of profits and losses among members, whereas S corporations cannot. S corporations must have one class of ownership in which profits and losses are allocated according to the percentage ownership.
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Is the LLC or S-Corp Better For You? An entity (corporation or LLC) that is taxed as an s-corporation has certain tax advantages. The key tax advantage (as of the writing of this webpage) is the ability to reduce your self-employment tax burden.
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Best Practices of Private Sector Employers One of the primary disadvantages of a corporation is the costs for running a corporate form of business. It costs money to incorporate with the state where the business operates. You can choose to hire an attorney or accountant to help you complete the incorporation paperwork, but it is not a requirement.
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Economy Production of Goods and Services Because of that, these three types of business organizations often operate in different kinds of markets. For example, most firms with large amounts of money invested in factories and equipment are organized as corporations. Specialization and the Division of Labor - Advantages of Specialization By specializing in what they produce, workers become more expert at a particular part of the production process. As a result, they become more efficient in these jobs, which lowers the costs of production.
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S Corp (S Corporation) Advantages & Disadvantages An S corporation shareholder’s personal assets, such as personal bank accounts, cannot be seized to satisfy business liabilities. However, like a sole proprietorship or a partnership, an S corporation passes through most of its income and loss items to the shareholders.
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- Buyers of shelf corporations have some big advantages over newly filed businesses. First, the benefits mentioned above. Then, the advantage of being able to purchase a well established corporation and yet put themselves in as officers, directors and shareholders, giving them immediate control of the business.tlantic Financial Services LLC Currently has a list of “pre-filed” shelf companies that you can acquire. By owning a pre-established corporate identity, you are able to take advantage of the following benefits: 1  Instant availability & fast delivery. 2  Immediately own a company with a corporate history.