Which of the Following Statements Is Correct

question 27

Multiple Choice

Which of the following statements is correct?

• A) A major disadvantage of a regular partnership or a company as a form of business is the fact that they do not offer their owners limited liability, whereas proprietorships do.
• B) An advantage of the company form for many businesses is the fact the corporate tax rate always exceeds the personal tax rate, which is the rate at which proprietorships and partnerships are taxed.
• C) There are more partnerships and sole proprietorships than companies in S.A., but companies produce more goods and services than do other forms of business.
• D) Because companies enjoy the benefits of limited liability, easy transferability of ownership interest, unlimited life, and favourable tax status relative to the situation for partnerships and proprietorships, most large businesses choose to incorporate.
• E) Because lawyers have the incorporation process so automated (e.g., word processors for drawing up the necessary papers), it is less expensive to form a company than to form a proprietorship or partnership.

---

Definitions:

Unbalanced

Lacking equilibrium or stability in terms of emotional state, workload, resource distribution, or other areas affecting individuals or groups.

Balance Theory

A psychological theory suggesting that individuals strive for consistency among their beliefs, attitudes, and sentiments in interpersonal relationships.

Heider

Refers to Fritz Heider, an Austrian psychologist known for his contributions to attribution theory and balance theory within social psychology.

Balanced State

A condition of mental or emotional stability where stresses and forces are well managed or in equilibrium.