What are the benefits of public coporation?

Answer 1

ADVANTAGES

1) shares are being sold to the general public via stock exchange, therefore there is an incentive to raise capital.

2)THere is a limited liability- if business fail to pay off its debts, then debtors could not force them to sell their private possessions.

3)the load of work is being divided among the shareholders

DISADVANTAGES

1) Accounts of the business would not be kept secret. for example Accountant could know about the company's trading methodology.

2)If a company becomes too large, the chances of bankruptcy would increase because management may loose control.

Answer 2

Merits of a public corporation

1. Corporations exist as separate legal entities whose shareholders have limited liability.

Demerits of a public corporation

1. A corporation has a designated tax identity.

Answer 3

The ability to raise large sums of capital from many sources, and the dividend return to investors if the corporation is successful.