Which of these is a reason why companies are more heavily regulated than sole proprietorships or partnerships?
A)The owners (shareholders)are often removed from the day-to-day running of the business.
B)As companies have limited liability, there is a greater need to protect creditors from financial loss.
C)The members of a company operate under the mutual agency principle.
D)Both A and B.

Question

Quizplus · Accepted Answer

Companies are more heavily regulated than sole proprietorships or partnerships for multiple reasons. One reason is that the owners (shareholders) are often removed from the day-to-day running of the business, leading to a need for external oversight. Another reason is that companies have limited liability, which means creditors have less direct recourse if they suffer financial loss. Therefore, there is a greater need to protect creditors from such loss through regulations.

Which of These Is a Reason Why Companies Are More