What are the advantages and disadvantages of the corporation's form of doing business?

Let us first see the advantages of having a corporation form of doing business:

1. The corporation has a separate legal existence which means a corporation is a separate person from the management or the people who own the corporation. It can enter into contracts in its own name.
2. The corporation has limited liability which means the liability of the stakeholders is limited to the amount invested by the stakeholders and hence their personal property remains untouched.
3. the corporation has perpetual succession which means the death or retirement of any member does not affect the existence of the corporation. It keeps functioning until it is not wound up.

Let us now see the disadvantages of having a corporation form of doing business:

1. The formation of a corporation involves heavy cost due to various legal compliances.
2. It has double taxation which means when the profit is earned by the corporation, the taxes are paid by the corporation, and also at the same time when the dividends are paid to the stakeholder, the stakeholders has to pay the tax on it.
3. The corporation has rigid complainces to follow in terms of taxation, legality, audit which increases paperwork and it is heavy on the pocket of the corporation.