Phillip and Dwight's train store has grown to the point that they need more capital to expand the current location and to open stores in other cities.They do not want the liability of taking out a loan and are no longer concerned about government oversight but would still like to maintain limited liability.They would most likely form a
A) corporation.
B) sole proprietorship.
C) syndicate.
D) co-op.

Question

Quizplus · Accepted Answer

A corporation offers limited liability to its owners, meaning that their personal assets are protected from creditors in case the company faces financial difficulties. Also, a corporation can issue stocks to raise capital, which would allow Phillip and Dwight to expand their store and open new locations without taking on a loan. Therefore, forming a corporation appears to be the best choice for their situation.

Phillip and Dwight's Train Store Has Grown to the Point