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Discussion: Legal Liability.
A corporation not only has to file the articles of incorporation and pay filing fees but also has to adopt corporate bylaws. Forming a corporation requires more finance, and it is more costly than forming a sole proprietorship or partnership. Common stock represents the basic ownership interest in a corporation, but some firms also issue preferred stock. The board of directors establishes the corporation’s mission and objectives. The board is rarely involved in the day-to-day working of the company. Since this all seems a bit of a hassle and expensive, why would you want to for a corporation instead of being a sole proprietor?
DISCUSSION: Give an example where the corporation has either protected or not protected the owners from liability. Why were they protected/not protected? Do you think it is right to protect people from the actions of their corporations? Discuss.
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