Which of the following advantages allows a Corporation to continue operating after the original founders pass away?

Disable ads (and more) with a membership for a one time $4.99 payment

Study for the Texas Aandamp;M University (TAMU) ACCT229 Exam. Get exam-ready with flashcards, detailed explanations, and multiple choice questions. Enhance your understanding and boost your confidence!

A significant advantage of corporations is that they have a "Continuity of Life." This feature means that a corporation continues to exist independently of the ownership interests of its founders or shareholders. If the original founders pass away, the corporation does not cease to exist; instead, it can continue to operate as usual because it is recognized as a separate legal entity. This perpetual existence allows for stability and longevity in their business operations.

Additionally, the "Easy Transfer of Ownership" plays a crucial role in this advantage. Shares of a corporation can be transferred to new owners without disrupting the ongoing operations of the business. Shareholders can buy and sell their stock with relative ease, which allows new owners to step in, ensuring the business can maintain its operations and carry on regardless of the original founders' presence.

Thus, both the continuity of life and the ease of ownership transfer work collectively, supporting the corporation's ability to operate continuously, making option D a comprehensive and accurate choice.