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:

Red Scare

Periods of intense fear and suspicion in the United States regarding the influence of communism and anarchists, notably after World War I and during the Cold War.

Civil Liberties

Fundamental rights and freedoms protected by law from governmental interference or deprivations without due process.

States Rights' Democratic Party

Known as the Dixiecrats, a short-lived segregationist political party in the United States that opposed civil rights laws for African Americans, maintaining a stance in favor of state's rights to legislate race relations.