How does the legal structure of a business affect investment decisions?
The legal structure, such as LLC, corporation, or partnership, influences liability, taxation, and investment appeal.
Can you explain how liability differs between these structures?
Sure! In a corporation, owners have limited liability, meaning personal assets are protected. In a partnership, liability is shared.
What about tax implications for investors?
Corporations face double taxation on profits, while LLCs and partnerships often allow profits to pass through to owners, avoiding double taxation.
Which structure is generally more attractive to investors?
Investors often prefer corporations due to limited liability and the ability to issue shares, making it easier to raise capital.
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