What is a common reason for a business to purchase an annuity?

A common reason for a business to purchase an annuity is to fund employee pensions. Annuities can provide a reliable income stream over a long period, making them well-suited for financing retirement benefits. By using an annuity, a business can ensure that it has a structured way to meet its obligations to employees upon retirement, helping guarantee that employees receive consistent payments throughout their retirement years.

The other options, while related to corporate financial decisions, do not align as closely with the primary purpose of annuities. For instance, charitable donations, buying out a partner's share, and distributing dividends to shareholders are generally not synonymous with the long-term investment and income strategy that annuities provide for pension funding.