Which of the Following Is the Most Likely Reason a Single

question 71

Multiple Choice

Which of the following is the most likely reason a single owner would establish a business as a corporation rather than as a sole proprietorship?

• A)Ease of setting up the business
• B)Limited liability
• C)Having to follow GAAP when preparing financial statements.
• D)Double taxation

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Definitions:

Owner

An individual or entity that possesses property, rights, or interests in an asset or item.

Capital Contribution

The funds, property, or other assets provided by owners or partners to a company for use in the business.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Dissolved

The process of officially closing and ending the existence of a company or partnership.