One advantage of the corporate form of organization is the:

• A. limited liability of shareholders
• B. unlimited life of the owners
• C. lack of government regulation
• D. ease of formation compared to a sole proprietorship

Answer: (A)

Verified step by step guidance

1. Understand the corporate form of organization: A corporation is a legal entity that is separate from its owners (shareholders). This separation provides certain advantages and disadvantages compared to other forms of business organization.
2. Analyze the concept of limited liability: In a corporation, shareholders are only liable for the amount they have invested in the company. Their personal assets are protected from the corporation's debts and legal obligations.
3. Evaluate the concept of unlimited life: Unlike sole proprietorships or partnerships, corporations have an indefinite lifespan. The death or departure of an owner does not affect the corporation's existence.
4. Consider government regulation: Corporations are subject to more government regulations compared to sole proprietorships or partnerships. This is not an advantage but rather a characteristic of the corporate form.
5. Compare ease of formation: Corporations are generally more complex and costly to form compared to sole proprietorships, which are simpler and require fewer formalities. This is not an advantage of the corporate form.