Which of the Following Statements Is Correct

question 46

Multiple Choice

Which of the following statements is correct?

• A) A shareholder's liability to contribute to the debts of an insolvent company is limited.
• B) The owner of a sole proprietorship is not legally liable for its debts.
• C) Special legal requirements must be met when forming a partnership.
• D) A partnership is a separate legal entity.

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Definitions:

Direct Taxes

Taxes levied directly on an individual's or organization's income or wealth, such as income tax or property tax.

Tax Revenue

The income that is gained by governments through taxation from individuals and businesses.

Federal Government

The national government of a federation, which holds authority over the political units constituting the federation, handling matters that affect the country as a whole.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the percentage of additional income that is paid in taxes.