Question

An entrepreneur has an idea for a new product in the technology industry. The product will require an initial investment to develop, manufacture, market, and distribute the product. While the product has unique applications that are not currently available to consumers, the industry has barriers to entry in terms of consumer brand loyalty, manufacturing, and product distribution. The entrepreneur is trying to decide what type of business organization to create for the production and sale of the product.

For which goal would the entrepreneur be BEST served by choosing to start a corporation rather than a sole proprietorship or partnership?


A

raising capital for manufacturing and distribution

B

maintaining control over product development

C

getting the product to market quickly

D

minimizing the long-term tax burden

Answer 1

A raising capital for manufacturing and distribution

Step-by-step explanation:

the greatest advantage of a corporation is that the entrepreneur can raise funds from a lot of different investors. Anyone that purchases stock form the company is investing money and helping the entrepreneur raise capital. If the project requires a lot of capital, the best way is to form a corporation. A sole-proprietorship or a partnership have limited sources for raising capital, plus the unlimited liability does not help either.