Which of the following statements is CORRECT?
A) One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
B) It is generally easier to transfer one's ownership interest in a
Partnership than in a corporation.
C) One of the advantages of the corporate form of organization is that
It avoids double taxation.
D) One of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e., "one person,
One vote."
E) Corporations of all types are subject to the corporate income tax.

Question

Quizplus · Accepted Answer

A sole proprietor has unlimited liability, meaning that they are personally responsible for all debts and obligations of the business, which can result in the loss of personal assets if the business cannot pay its debts.

Answer: C 
 One of the advantages of the corporate form of organization is that it can avoid double taxation. This is because the corporation is a separate legal entity from its owners and is taxed on its profits. The owners, or shareholders, are then taxed only on the dividends they receive, rather than on the entire profit of the corporation.

Answer: E 
 Corporations of all types are subject to the corporate income tax. This tax is based on the corporation's taxable income, which is usually its revenue minus deductible expenses. The tax rate varies depending on the type of corporation and its taxable income level.

Which of the Following Statements Is CORRECT