Which of the Following Is an Advantage of a C

question 54

Multiple Choice

Which of the following is an advantage of a C Corporation?

• A) Setting up and maintaining one is more difficult than for a sole proprietorship or a partnership.
• B) Stock is liquid if traded on a major stock exchange.
• C) Business losses cannot be deducted against the shareholders' other sources of income.
• D) Income is subject to double taxation.
• E) Small shareholders typically have little voice in the management of the firm.

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Definitions:

Liability

Liability refers to legal financial debts or obligations that arise during the course of business operations, which an entity is responsible for settling.

Capital

Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.

Investment

Assigning monetary resources with the goal of achieving income or gains.

Corporate Stock

Shares of ownership in a corporation, representing a claim on part of the corporation's assets and earnings.