Which of the following statements is CORRECT?
A) One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.
B) Sole proprietorships are subject to more regulations than corporations.
C) In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.
D) Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.
E) Corporations of all types are subject to the corporate income tax.

Question

Quizplus · Accepted Answer

Sole proprietorships and partnerships do not pay corporate income tax, instead the owners report their share of the business's income on their personal tax returns, which may result in lower tax rates than large corporations.

Which of the Following Statements Is CORRECT