Torrie Is Thinking of Starting Up a Small Business Selling

question 169

Multiple Choice

Torrie is thinking of starting up a small business selling hand-painted wine glasses.She is considering setting up her business as a corporation.What is one advantage to Torrie of setting up her business as a corporation?

• A)By setting up the business as a corporation,Torrie would not face double taxation.
• B)By setting up the business as a corporation,Torrie would have the ability to share risk with shareholders.
• C)By setting up the business as a corporation,Torrie would have both ownership and control over the business.
• D)All of the above would be advantages of setting up her business as a corporation.

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Definitions:

Profit Margin

A financial metric indicating the percentage of revenue that remains as profit after all expenses are deducted.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Net Income

Net Income is the total profit of a company after all expenses have been deducted from revenues.

Effective Tax Rate

The average rate at which an individual or a corporation is taxed, calculated by dividing the total tax by the taxable income.