What Is One of the Disadvantages of a Corporation, When

question 107

Multiple Choice

What is one of the disadvantages of a corporation, when compared to a partnership?

• A) The corporation provides continuity of life.
• B) The corporation and its shareholders are potentially subject to double taxation.
• C) The shareholders are treated as a separate legal entity from the corporation.
• D) The shareholders have limited liability.

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Definitions:

Liabilities

Financial obligations or debts that a business owes to others, which must be paid back in the future.

Owner's Equity

The residual interest in the assets of a company after deducting liabilities, representing ownership interest.

Ratio

A quantitative relationship between two numbers, showing how many times one value contains or is contained by the other.

Manufacturing Business

A type of business that produces goods in large quantities using raw materials and machinery.