Which of the Following Statements Is CORRECT

question 28

Multiple Choice

Which of the following statements is CORRECT?

• A) It is generally more expensive to form a proprietorship than a corporation because, with a proprietorship, extensive legal documents are required.
• B) Corporations face fewer regulations than sole proprietorships.
• C) One disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation, at both the firm level and the owner level.
• D) One advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.
• E) If a regular partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.

---

Definitions:

Abbreviation

A shortened form of a word or phrase used to save space or avoid repetition.

Hexagon

A polygon with six edges and six vertices, often seen in tools, nuts, and bolts due to its efficient load distribution and ease of wrenching.

Spotface

A localized, flat surface machined on a part, typically around a hole, providing a seating surface for a fastener or bearing.

Bushings

Mechanical components used to reduce friction between rotating shafts and stationary support members, often serving as a replaceable lining.