Question

What were the advantages of corporations over partnerships? Why were they good for investors and partners?

A. Limited liability protection for investors
B. Joint decision-making for partners
C. Shared personal assets in partnerships
D. Faster decision-making in corporations

Answer 1

Corporations offer limited liability protection for investors and faster decision-making compared to partnerships.

Step-by-step explanation:

The advantages of corporations over partnerships include:

1. Limited liability protection for investors: Unlike partnerships where partners are personally liable for the debts and obligations of the business, investors in corporations are generally only liable for the amount they have invested in the company.
2. Faster decision-making in corporations: Corporations typically have a board of directors and designated management team, which allows for quicker and more efficient decision-making compared to partnerships where all partners may need to be consulted.

These advantages make corporations appealing to investors as they offer limited risk and the potential for faster growth. Partnerships, on the other hand, may offer shared personal assets and joint decision-making, but they lack the same level of limited liability protection and efficiency as corporations.