Which of the Following Statements Best Describes Firm Organization

question 44

Multiple Choice

Which of the following statements best describes firm organization?

• A)It is usually easier to transfer ownership in a corporation than it is to transfer ownership in a sole proprietorship.
• B)Corporate shareholders are exposed to unlimited liability.
• C)Corporations generally face fewer regulations than sole proprietorships.
• D)Corporate shareholders are exposed to unlimited liability, and this factor may be compounded by the tax disadvantages of incorporation.

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Definitions:

Lump-Sum Tax

A tax that is a fixed amount and does not vary with the taxpayer's income or consumption levels.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to tax, meaning everyone pays the same proportion of their income.

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases, disproportionately affecting lower-income individuals.

Interactional Justice

Refers to the quality of the interpersonal treatment people receive when a decision is implemented.