There Are Several Benefits to Incorporating a Business

question 1

Multiple Choice

There are several benefits to incorporating a business.Some of the benefits are:

• A)Lower tax rates are often recognized; the shareholder may receive compensation; the corporation offers preferable tax rates on the business' investment income
• B)The shareholder may choose when they will receive dividend income from the corporation; a capital gains deduction may be available if conditions are met when shares are transferred to the shareholder's children; the small business deduction on the first $500,000 of active business income
• C)There is greater flexibility to bring family members on board as owners; non-taxable benefits may be provided to the shareholder; dividend distributions are deductible for tax purposes
• D)A tax deferral is available if the shareholder requires the corporation's profits for personal use in the year; the shareholder may participate in a registered pension plan through the corporation; dividend payments may be deferred until after a shareholder has retired.

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Definitions:

Inheritance

A feature of object-oriented programming where a class can inherit properties and methods from another class.

Default Access

A type of access modifier in Java where a member is accessible within its own package and is not available from outside the package if no specific access modifier is specified.

Package Access

A type of access control in Java where members of a class are accessible within the same package but not from outside.

Derived Class

A class in object-oriented programming that inherits methods and properties from another class, known as the base or parent class.