What is the main advantage of a corporation compared to other business structures?

The main advantage of a corporation, compared to other business structures, is limited liability. In a corporation, the owners, typically known as shareholders, are financially protected from the corporation's debts and liabilities. This means that if the corporation faces financial difficulties or legal issues, the personal assets of the shareholders cannot be used to satisfy the corporation's debts. Their risk is limited to the amount they have invested in the corporation.

Limited liability encourages investment because it reduces the risk for shareholders. This feature is particularly appealing for potential investors, as they can participate in the corporation's growth and profits without jeopardizing their personal wealth. It differentiates corporations from sole proprietorships and partnerships, where owners can be personally liable for the business's debts, potentially risking their own savings and assets.