corporation versus unincorporated assocation

Business & Finance
Tutor: None Selected Time limit: 1 Day

Please explain briefly why an organization may choose to form a new corporation in which to conduct its operations rather than to be an unincorporated association.

Sep 23rd, 2015

Thank you for the opportunity to help you with your question!

To have limited liability

This ensures that the liability of the members of the incorporated organization have limited liability. In case the incorporation is dissolved they are only liable to contribute towards debt payment only up to the amount that they are owed in their shares. no member of the company loses personal property as a result. this is a risk control measure that the members undertake to have control over their own personal assets.

Additionally, by incorporating the organization the management will be forced by the state law to conform to standard accounting practices of data entry and reporting. This will act as a control measure on the management to ensure that they conform to Generally Accepted Accounting Practices (GAAPs) and face regular annual audits.


Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 24th, 2015

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Sep 23rd, 2015
...
Sep 23rd, 2015
Dec 3rd, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer