Which of the Following Corporate Characteristics Is a Disadvantage of a Corporation

question 251

Multiple Choice

Which of the following corporate characteristics is a disadvantage of a corporation?

• A) Stockholders have limited liability.
• B) A corporation has a continuous life.
• C) There is no mutual agency between the stockholders and the corporation.
• D) Earnings of a corporation may be subject to double taxation.

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Definitions:

Tax Liability

The total amount of tax owed to the government by an individual, corporation, or other entity in a specified tax period.

Form 1040EZ

A simplified tax form for individuals with straightforward financial situations, allowing them to report income and calculate taxes owed.

Taxable Income

The portion of an individual's or corporation's income used to determine how much tax is owed to the government.

Filing Status

A category that describes a taxpayer's marital and family situation, affecting the tax rates and standard deductions they are eligible for.