Which of the Following Could Explain Why a Business Might

question 35

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 find it relatively difficult to raise large amounts of capital.
• B) Less of a corporation's income is generally subjected to taxes than would be true if the firm were a partnership.
• C) Corporate shareholders escape liability for the firm's debts, but this factor may be offset by the tax disadvantages of the corporate form of organization.
• D) Corporate investors are exposed to unlimited liability.
• E) Corporations generally face relatively few regulations.

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Definitions:

Poison Arrow Frogs

A group of brightly colored frogs that are known for their powerful toxins, which indigenous people have used on the tips of arrows or darts for hunting.

Fruit-Eating Bats

Bats that primarily consume fruits or nectar from flowers, playing critical roles in ecosystem dynamics such as pollination and seed dispersal.

Ecotone

The transition zone where two communities meet and intergrade.

Transitional Zone

An area or region where two different habitats or ecological communities meet and integrate, often hosting a high diversity of species.