If your primary objective is to raise capital from the public, which form of business entity is the correct choice?

Choosing a corporation as the form of business entity when the primary objective is to raise capital from the public is the most appropriate decision. Corporations have the ability to issue shares of stock, which makes it easier for them to attract investment from a wide range of investors, including the general public.

When a corporation issues shares, it can raise significant amounts of money by attracting various investors who purchase these shares, thus providing the corporation with access to capital without incurring debt. Additionally, corporations can consider going public through an Initial Public Offering (IPO), further enhancing their ability to raise funds on a larger scale.

In contrast, sole proprietorships, partnerships, and limited liability companies (LLCs) do not have the same level of access to public capital markets. Sole proprietorships rely entirely on the owner's resources and might struggle to obtain funds from external investors. Partnerships can pool resources but typically limit the number of investors, which restricts the potential for raising larger amounts of capital. LLCs can attract investment but do not have the same straightforward means to issue shares to the public as corporations do. Hence, when focused on capital raising, corporations offer the most advantages.