Which business structure has been shown to have better access to capital compared to others?

C corporations are generally recognized for having better access to capital compared to other business structures. This is largely due to their ability to issue multiple classes of stock and attract investors. C corporations can sell shares to the public through an initial public offering (IPO), thereby raising substantial amounts of capital from a wide range of investors. They also can offer various types of securities, which can be more appealing to institutional investors.

Moreover, C corporations benefit from greater credibility in the eyes of lenders and investors. Their formal structure, regulatory requirements, and governance practices, which include having a board of directors and regular shareholder meetings, enhance trust and stability, making it easier to secure financing.

In contrast, business structures like S corporations, general partnerships, and sole proprietorships face more challenges in raising capital. For instance, S corporations are limited in the number of shareholders they can have, which may restrict their potential for raising funds. Partnerships and sole proprietorships may rely heavily on personal funds or loans, generally lacking the same level of investor appeal as C corporations. This makes the C corporation the more advantageous option for entities seeking broader access to capital markets.