Which of the following is a disadvantage of the corporation compared to the sole proprietorship?
A)limited liability
B)difficulty raising start-up money
C)lack of profitability
D)corporate income is taxed twice
E)corporations are more vulnerable in the case of the death of an owner

Question

Quizplus · Accepted Answer

The disadvantage of the corporation compared to the sole proprietorship is that the corporate income is taxed twice. The corporation pays taxes on its profits, and then the shareholders pay taxes on the dividends they receive. This can result in a higher overall tax burden compared to the sole proprietorship, where the owner only pays personal income taxes on the business income.

Which of the Following Is a Disadvantage of the Corporation