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:

Rescission

Rescission is the act of invalidating a contract, returning the parties involved to their positions prior to the agreement, under circumstances such as misrepresentation or fraud.

Fraudulent Misrepresentation

A false statement made knowingly or recklessly with the intent to deceive, leading another to enter into a contract.

Void Ab Initio

A term meaning "void from the beginning," indicating that a contract or agreement was invalid from the start.

Straight Commission

A compensation model in sales where an employee's income is derived entirely from the commissions made on the sales they secure.