Which of the following statements is CORRECT? Group of answer choices Unlimited liability and limited life are two key advantages of the corporate form over other forms of business organization. Limited liability is an advantage of the corporate form of organization to its owners (stockholders), but corporations have more trouble raising money in financial markets because of the complexity of this form of organization.

Question

28-01-2020
Business

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Which of the following statements is CORRECT? Group of answer choices Unlimited liability and limited life are two key advantages of the corporate form over other forms of business organization. Limited liability is an advantage of the corporate form of organization to its owners (stockholders), but corporations have more trouble raising money in financial markets because of the complexity of this form of organization.

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kaympoey08 kaympoey08 · Answer 1 · 2020-01-30T02:54:11+01:00

Answer:

The correct statement is; Limited liability is an advantage of the corporate form of organization to its owners (stockholders), but corporations have more trouble raising money in financial markets because of the complexity of this form of organization.

Explanation:

A limited company can either be private or public. A limited company posses these 2 key features namely;

1. Limited liability- the liability of shareholders is limited to the amount of their investment in the company.

2. Seperate legal existence- a limited company can in it's name sue, be sued and enter into contracts.

Limited liability means that the investors can only lose the money they have invested and no more, meaning lenders have to keep this in mind when issuing loans to limited companies.