The selection of a particular form is often driven by the founders’ preferences for the characteristics previously discussed and by market realities. With the availability of LLCs, LLPs, and S corporations, under most circumstances, the disadvantages of the general partnership form are so severe that one is usually well-advised to avoid it. Another consideration in the selection is the amount of capital needed by the enterprise. It is not rare to find someone with a great idea but with insufficient resources to take the idea to market. Some investors, such as venture capitalists, seek out such persons. They will usually insist that the venture have limited liability, as would be true with a corporation or an LLC. 

Questions

1. From initiating the process through the election of directors, describe the steps generally followed to bring a corporation into existence. 

2. What are the advantages and disadvantages of dual-class common stock? 

3. a. Why are sole proprietorships problematic if a proprietor dies or becomes disabled? 

b. Do partnerships experience similar problems? 

4. a. What characteristics of an LLC cause it to be one of the two fastest-growing business forms in the United States? 

b. What are its advantages over an S corporation? Are there any disadvantages? 

5. Why are corporations the dominant form of business based on revenues in the United States?