Forming a corporation is no small undertaking. Yet there may be reasons for a family business or other form of equity ownership among individuals to make this choice.
Limited liability and corporate forms are generally more conducive to raising capital because investors are shielded form individual liability. A corporation, with its accompanying organizational and formation documents, may be better suited to handle a business’s rapid development and growth. Perhaps a company is launching a potentially risky project and the original owners want to be shielded from personal liability from operational debts and taxes.