Which of the following is a TRUE statement about a company?
A)A company is not taxed on the company's business income.
B)The owners of a company have limited liability for the company's debts.
C)A company has a limited life.
D)The owners of a company have co-ownership of the property of the company.

Question

Quizplus · Accepted Answer

One of the main advantages of forming a company is the limited liability protection it provides. This means that the owners (shareholders) are not personally responsible for the company's debts and liabilities. Only the company's assets can be used to pay off any debts or legal obligations.

Option A is incorrect because companies are subject to income tax on their business income.

Option C is also incorrect because a company can have an unlimited life span, unlike a partnership which may dissolve upon the departure of one of the partners.

Option D is incorrect because the property of the company belongs to the company, not the owners. The shareholders may have ownership in the company through their shares, but they do not have direct ownership of the company's assets.

Which of the Following Is a TRUE Statement About a Company