Which One of the Following Statements Is Correct

question 8

Multiple Choice

Which one of the following statements is correct?

• A)Both partnerships and corporations incur double taxation.
• B)Sole proprietorships and partnerships are taxed in a similar fashion.
• C)Partnerships are the most complicated type of business to form.
• D)Both partnerships and corporations have limited liability for general partners and shareholders.
• E)All types of business formations have limited lives.

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Definitions:

Related Parties

Individuals or entities that are closely connected to a business, potentially influencing the financial and operating results.

Investment

The allocation of resources, typically money, in the expectation of generating an income or profit.

Joint Control

A situation in which two or more parties exercise shared control over a business activity, venture, or entity according to an agreement.

Subsidiaries

Companies that are controlled by another company, known as the parent company, through ownership of more than 50% of the subsidiary's voting stock.