Question

Businesses can be classified into the following forms: sole proprietorship, partnership, corporation, limited liability company (LLC), and limited liability partnership (LLP).Different forms of businesses have different characteristics. Which of the following characteristics would apply to a corporation?

Owned by single individual
Owners have limited liability
Exempt from double taxation
Easier to transfer ownership in the form of stock
Chartered by a state and is its own legal entity separate and distinct from its owners and managers
Has unlimited life

Answer 1

Owners have limited liability.

Step-by-step explanation:

A corporation is an entity , established by shareholders or individuals with the aim of making profit. It is a legal entity hence can enter into a contract, can also sue and be sued.

The legal process involved in the establishment of corporation is called incorporation. It contains the main reason why the corporation is in business, name and office address, types and number of shares to be issued.

Because the business is incorporated and also a legal entity, it means that the owners are protected personally should their be any litigation against the corporation. Moreover, the liability of the owners are limited to the investment in the corporation.