[Tutoring Concerns] André and Sasha Want to Go into Business

question 30

Multiple Choice

[Tutoring Concerns] André and Sasha want to go into business together and plan on offering a tutoring service to high school and college students. André proposes that they share control of the business and split profits equally and not bother with a written agreement. Sasha, however, is concerned about being able to pay their debts, since they will have to rent tutoring space, and purchase computers and supplies. She is also concerned about parents and students who may sue if their test scores do not improve. She tells André that she just bought a new boat and car, and that she does not want her assets to be in jeopardy. She tells André that they should form a corporation to shield their personal assets. André, however, tells Sasha that their personal assets are not in danger with his proposal because they are a business and that, furthermore, forming a corporation would result in a tax being imposed twice.
-Which of the following is true regarding André's assertion regarding taxes?

• A) André is correct insofar as the corporation would be required to pay taxes on its profits, and the shareholders would also be required to pay taxes on dividends.
• B) André is incorrect because all businesses are taxed in the same manner.
• C) André is incorrect but only because the law involving taxation of corporations does not apply until there are at least 10 shareholders.
• D) André is incorrect but only because the law involving taxation of corporations does not apply until there are at least 75 shareholders.
• E) André is correct but only because his proposal does not involve a writing and the filing of paperwork with the secretary of their state.

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Definitions:

Hardy-Weinberg Principle

A rule that declares the frequencies of alleles and genotypes in a population will stay unchanged over time if there are no other evolutionary factors at play.

Random Matings

A mating system in which all members of a population have an equal opportunity to mate with any other member, contributing to genetic diversity.

Nonrandom Matings

A mating pattern in which individuals do not mate randomly or by chance, but rather select mates based on certain traits or proximity.

Genotype Frequency

Genotype frequency refers to the proportion of different genetic variants (genotypes) present in a population.