What is one of the drawbacks of switching from a partnership to the corporate form of organization?
A)It subjects the firm to additional regulations.
B)It makes it more difficult for the firm to raise additional capital.
C)It makes the firm's investors subject to greater potential personal liabilities.
D)It makes it more difficult for the firm's investors to transfer their ownership interests.

Question

Quizplus · Accepted Answer

Switching from a partnership to a corporate form of organization subjects the company to additional regulations, which could increase the company's compliance costs. This can pose a disadvantage to the company as it may have to spend more resources to comply with laws and regulations, such as filing requirements, financial accounting standards, and tax regulations.

What Is One of the Drawbacks of Switching from a Partnership