Which of the Following Could Explain Why a Business Might

question 39

Multiple Choice

Which of the following could explain why a business might choose to operate as a corporation rather than as a sole proprietorship or a partnership?

• A) Corporations generally find it relatively difficult to raise large amounts of capital.
• B) Less of a corporation's income is generally subjected to taxes than would be true if the firm were a partnership.
• C) Corporate shareholders escape liability for the firm's debts, but this factor may be offset by the tax disadvantages of the corporate form of organization.
• D) Corporate investors are exposed to unlimited liability.
• E) Corporations generally face relatively few regulations.

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