Which of the Following Is a Key Advantage of Incorporating

question 52

Multiple Choice

Which of the following is a key advantage of incorporating a business as a sole proprietorship?

• A) Owners receive tax exemptions when a business is a sole proprietorship.
• B) It helps proprietors file taxes separately from their personal income.
• C) It is easy to establish and requires less paperwork than other structures.
• D) Owner's risk is limited to the extent he/she has invested in the business.
• E) Risk associated with sole proprietorship is less, compared to other structures.

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Definitions:

Privileged Subscription

An offer to existing shareholders to purchase additional shares in a company before the new shares are offered to the public.

Holder-Of-Record Date

The specific cutoff date established by a corporation by which one must be on the company's books as a shareholder to receive a dividend or other distribution.

Percentage Ownership

The fraction of a company's shares owned by an individual or entity, expressed as a percentage of the total shares outstanding.

Ex-Rights

A status of a stock that signifies it is being traded without the right to receive the most recent dividend payment or issuance.