There Are Several Benefits to Incorporating a Business

question 2

Multiple Choice

There are several benefits to incorporating a business.Which of the following is NOT a benefit of incorporating?

• A)The small business deduction provides a tax reduction on the first $500,000 of active business income.
• B)Dividends paid to shareholders are deductible business expenses.
• C)There is greater flexibility to bring family members on board as owners.
• D)The owner/employee may participate in a registered pension plan through the corporation.

---

Definitions:

Incremental Cash Inflow

Additional cash received as a result of undertaking an investment or project.

Net 30 Credit Policy

A payment term that indicates that the payment for goods or services is due 30 days from the invoice date.

Monthly Interest Rate

The interest rate applied to a loan or debt for a one-month period.