The ability of a corporation to obtain capital is
A) enhanced because of limited liability and ease of share transferability.
B) less than a partnership.
C) restricted because of the limited life of the corporation.
D) about the same as a partnership.

Question

Quizplus · Accepted Answer

A corporation has limited liability, which means that the shareholders are not personally liable for the debts and obligations of the corporation. This makes it easier for investors to put their money into the corporation since they are protected from potential losses beyond their investment. Additionally, share transferability is easier in a corporation than in a partnership, where ownership is more restricted. Therefore, the ability of a corporation to obtain capital is enhanced.

The Ability of a Corporation to Obtain Capital Is