An Advantage of Proprietorships Is

question 212

Multiple Choice

An advantage of proprietorships is

• A) the ease with which they can be formed and dissolved.
• B) their ability to raise large amounts of equity capital.
• C) the fact that their profits are not taxed.
• D) the breadth of management expertise that comes from having a board of directors.

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Definitions:

No-Par Value Stock

Capital stock that has not been assigned a value in the corporate charter.

Legal Capital

The minimum amount of capital that a corporation is required to maintain, as mandated by corporate laws, to protect creditors.

Dividends

Shareholders' receipts of payments from a corporation, generally tied to the distribution of earnings.

Incorporated

A legal process used to form a corporate entity or company, recognized separately from its owners with its own legal rights.