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What are the advantages and disadvantages of a corporation when compared to other business entities?

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What are the advantages and disadvantages of a corporation when compared to other business entities?

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The biggest advantage of incorporation is limited liability for shareholders. Under law, a corporation is considered to be a legal person that is distinct from the shareholders who own it. This means that individual shareholders are not personally liable for the debts and obligations of the corporation. If a corporation fails then the shareholders will only lose the amount of the purchase price of their original shares. One disadvantage of a corporation is that income is taxed at two levels: first on income for the corporate entity, and then at the shareholder level where shareholders are taxed on any dividends they have received.

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A. The biggest advantage of incorporation is limited liability for shareholders. Under law, a corporation is considered to be a legal person that is distinct from the shareholders who own it. This means that individual shareholders are not personally liable for the debts and obligations of the corporation. If a corporation fails, the shareholders will lose the amount of equity invested with their shares. One disadvantage of a corporation is that income is taxed at two levels: first on income for the corporate entity, and then at the shareholder level where shareholders are taxed on any dividends they have received.

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