The following is one disadvantage of incorporation: B)potential loss of control by founders
Further explanation
Disadvantages of Incorporation of a Company are:
- Cost. The initial cost of incorporation includes the fee required to file your articles of incorporation, potential attorney
- Double Taxation. Some types of corporations such as a C Corporation, have the potential to result in double taxation.
- Loss of Personal “Ownership”. If a corporation is a stock corporation, one person doesn’t retain complete control of the entity.
- Required Structure. When you form a corporation, you are required to follow all of the rules outlined by the state in which you filed.
- Ongoing Paperwork. Most corporations are required to file annual reports on the financial status of the company.
- Difficulty Dissolving. While perpetual existence is a benefit of incorporating, it can also be a disadvantage because it can require significant time and money to complete the necessary procedures
- Lifting of Corporate Veil. From the juristic point of view, a company is a legal person distinct from its members
Learn more
- Learn more about incorporation brainly.com/question/12256626
- Learn more about limited liability brainly.com/question/9244934
- Learn more about transferable ownership brainly.com/question/8935077
Answer details
Grade: 9
Subject: history
Chapter: incorporation
Keywords: disadvantage, incorporation, transferable ownership, long life, liability