Question

13. Which of the following statements is CORRECT? Group of answer choices One of the disadvantages...

13.

Which of the following statements is CORRECT?

Group of answer choices

One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.

Sole proprietorships are subject to more regulations than corporations.

In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.

Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.

Corporations of all types are subject to the corporate income tax.



14.

Which of the following statements is CORRECT?

Group of answer choices

It is generally more expensive to form a proprietorship than a corporation because, with a proprietorship, extensive legal documents are required.

Corporations face fewer regulations than sole proprietorships.

One disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation, at both the firm level and the owner level.

One advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.

If a regular partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.

Homework Answers

Answer #1

Ans 13) Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.

Partnerships and sole proprietorships are given more investment deductions and get less tax rates which benefit them over corporates.

Ans 14) One advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.

The liability of equity investors is limited only upto the amount of per share bought by them.

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