Which of the Following Could Explain Why a Business Might

question 54

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 face fewer regulations.
• B) Less of a corporation's income is generally subject to federal taxes.
• C) Corporate shareholders are exposed to unlimited liability, but this factor is offset by the tax advantages of incorporation.
• D) Corporate investors are exposed to unlimited liability.
• E) Corporations generally find it easier to raise large amounts of capital.

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