Which of the Following Could Explain Why a Business Might

question 35

Multiple Choice

Which of the following could explain why a business might choose to operate as a corporation rather than as a sole proprietorship or a partnership?

• A) Corporations generally find it relatively difficult to raise large amounts of capital.
• B) Less of a corporation's income is generally subjected to taxes than would be true if the firm were a partnership.
• C) Corporate shareholders escape liability for the firm's debts, but this factor may be offset by the tax disadvantages of the corporate form of organization.
• D) Corporate investors are exposed to unlimited liability.
• E) Corporations generally face relatively few regulations.

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Definitions:

Court Opinion

A formal statement written by a judge or a court of law detailing the reasoning behind a verdict in a case.

Dicta

Comments made by a judge in a court opinion that are not essential to the decision and therefore not legally binding as precedent.

Court's Statements

Official pronouncements or declarations made by a judge or court of law regarding a legal matter or case.

Court's Decision

The final judgment or order given by a court in legal proceedings.