Multiple Choice
Which of the following is primarily responsible for executing the business strategy within an organization?
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1. Introduction to Accounting
Business Organization
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Limited liability and ease of raising outside capital are advantages of which form of business organization?
A
Partnership
B
Cooperative
C
Corporation
D
Sole proprietorship
Verified step by step guidance1
Understand the characteristics of each form of business organization mentioned in the problem: Partnership, Cooperative, Corporation, and Sole Proprietorship.
Recall that a Corporation is a separate legal entity from its owners, which provides limited liability protection to its shareholders. This means shareholders are not personally liable for the corporation's debts beyond their investment.
Recognize that Corporations have the ability to raise outside capital effectively by issuing shares of stock to investors, which is a key advantage over other forms of business organizations.
Compare this advantage to other forms of business organizations: Partnerships and Sole Proprietorships typically have limited access to outside capital, and Cooperatives are structured differently with a focus on member benefits rather than external capital raising.
Conclude that the correct answer is Corporation, as it aligns with the advantages of limited liability and ease of raising outside capital.
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