Which of the following statements about the corporate form of business organization is true?
A) The corporate form has the disadvantage of double taxation relative to a sole proprietorship.
B) The corporate form is preferred over the sole proprietorship because a corporation is easier to form and faces less regulation.
C) Sole proprietorships are the most common form of business organization because liability is limited to the amount invested in the business by the sole proprietor.
D) The corporate form has the advantage of unlimited liability.

Question

Quizplus · Accepted Answer

The corporate form of business organization has the disadvantage of double taxation, meaning that the corporation pays taxes on its profits, and then shareholders pay taxes on the dividends they receive from those profits.

Which of the Following Statements About the Corporate Form of Business