Question

One advantage of the corporate form of organization is the:

Multiple Choice

• taxation of the corporate profits.

• unlimited liability for its shareholders.

• double taxation of profits.

• ability to raise larger sums of equity capital than other organizational forms.

• ease of formation compared to other organizational forms.

Answer 1

Option D

a) corpoate is taxed at higher rate as compare to the other entity , so it is disadvantage

b) its shareholders have limited liability so the statement is incorrect

c) double taxation of proift is not advantage, first company is taxed for proift and then sharehoders. So this is disadvantage

d) this is true, corporate has theability to raise fund larger sum as compare to thte other form of enity

e) formation of corporation is not easy, rather most difficulty in compare to other form of entity. So this statmenis incorrect

so the correct option is option (d)