Which of the Following Is a Disadvantage of a Corporation

question 121

Multiple Choice

Which of the following is a disadvantage of a corporation when compared to a partnership?

• A)The stockholders have limited liability.
• B)The corporation is treated as a separate legal entity from the stockholders.
• C)The corporation and its stockholders are subject to double taxation.
• D)The corporation must account for the transactions of the business as separate and apart from those of the owners.

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Definitions:

Good Faith

The sincere aim to behave without exploiting another party unfairly in a deal.

Commercial Standards

Commercial Standards are established norms or criteria within a business sector that guide the quality, performance, and conduct of activities in that field.

Treated

Subjected to a specific process or course of action, typically to achieve a certain effect or outcome.

Owns

To own means to have legal right or title to an object, property, or asset, granting the holder exclusive rights to the use, enjoyment, and disposition of that asset.