Question

Although members may choose to reconstitute an LLC after it dissolves, limited ___ ____ is considered a disadvantage of this form of business.

1) liability protection
2) tax benefits
3) ownership flexibility
4) capital raising capabilities

Answer 1

Limited capital raising capabilities are considered a disadvantage of LLCs compared to corporations that can raise funds by selling stock or issuing bonds.

Step-by-step explanation:

Although members may choose to reconstitute an LLC after it dissolves, limited capital raising capabilities is considered a disadvantage of this form of business. This disadvantage contrasts with corporations that can raise funds more easily through selling stock or issuing bonds.

In an LLC, the ability to raise capital is often limited to the contributions of its members, and external financing can be more challenging to secure unlike in other business structures such as corporations which benefit from selling shares and bonds.