Why is it advantageous for firms to organize themselves as a set of separate leg

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Why is it advantageous for firms to organize themselves as a set of separate legal entities? How do consolidated financial statements benefit these firms?

Oct 4th, 2015

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

Separate legal entities means that the firm has distinct and separate existence from their members. Firm has capacity to sue and be sued, also it can own a property in its own name.

Firms with separate legal entity enjoys the privilege of borrowing funds for investment from the public as allowed by law, and they can also trade their shares in the public security exchange which expands their capital base.

Consolidated financial statements benefits these firms by increasing their profits, and this increase the amount of dividends to be allotted to the shareholders. Profitability of the entity is a key contribution towards investors attraction and building shareholders confidence.

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Oct 5th, 2015

my dear friend, please feel free to contact me at any time if you need further clarification on any unclear issue, I will be much obliged to work on your questions

Oct 5th, 2015

my dear friend, please feel free to contact me at any time if you need further clarification on any unclear issue, I will be much obliged to work on your questions

Oct 5th, 2015

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