Compared with a partnership, the ability of a corporation to obtain capital is how affected by its legal structure and ownership features?

Introduction / Context:
The ability of a business to raise capital depends heavily on its legal form and the rights of investors. Corporations, partnerships and sole proprietorships differ in ownership structure, liability and continuity. Examinations in accounting and business environment often ask why corporations are popular for large enterprises. One key reason is that corporations can raise funds more easily by issuing shares and debt, supported by limited liability and transferable ownership.

Given Data / Assumptions:

• The question compares a corporation with a partnership.
• We focus on the ability to obtain capital, not on taxation or management structure.
• Options mention similar ability, enhanced ability, restricted ability and less ability compared to a partnership.
• We assume a legal environment where corporations provide limited liability and shares can usually be transferred or traded.

Concept / Approach:
Corporations have several features that make capital raising easier. Shares can be sold to many investors, including the general public in the case of public companies. Limited liability means that shareholders risk only the amount invested, making the investment more attractive. Additionally, shares are often transferable, allowing investors to exit without disrupting the company. Partnerships, by contrast, typically have a smaller number of partners, unlimited or high personal liability, and restrictions on transferring partnership interests. These differences mean corporations generally have an enhanced ability to obtain capital.

Step-by-Step Solution:
Step 1: Consider option a, which claims the ability to obtain capital is "about the same as a partnership". This ignores the advantages of access to public markets and larger numbers of investors.Step 2: Option b states that the ability is "enhanced because of limited liability and ease of share transferability". This aligns closely with the standard explanation in textbooks.Step 3: Option c suggests that capital raising is restricted due to limited life of the corporation. In reality, corporations often have perpetual existence, not limited life.Step 4: Option d claims the corporate ability is less than a partnership, which conflicts with the fact that large operations typically choose corporate structure precisely to expand capital raising capacity.Step 5: Therefore, option b provides the most accurate description.

Verification / Alternative check:
Think of major companies listed on stock exchanges. They are corporations that regularly issue shares and bonds to raise funds from thousands or millions of investors. Partnerships rarely have that scope because adding or removing partners is more complicated and personal liability is greater. This simple comparison between a large listed corporation and a small professional partnership confirms that the corporate form enhances the ability to access capital markets.

Why Other Options Are Wrong:
Option a underestimates the difference between forms and therefore is not accurate. Option c is based on a false premise that corporations have limited life; in fact, partnerships are more vulnerable to dissolution when partners leave. Option d reverses reality by claiming corporations have less ability to obtain capital than partnerships. These statements contradict the widely observed fact that corporations dominate large scale capital intensive industries because of their superior fundraising capacity.

Common Pitfalls:
Students sometimes focus on double taxation or regulatory complexity of corporations and overlook the advantages in capital access. Another pitfall is to think only about small private companies, where the difference from partnerships may appear modest. However, the question is about general ability, and in general corporations can tap both equity and debt markets more easily. Remember that limited liability and share transferability are powerful mechanisms that attract many investors and enhance the firm's capacity to raise funds.

Final Answer:
The ability of a corporation to obtain capital is enhanced because of limited liability and ease of share transferability compared with a partnership.