A company is a legal entity and as such has an additional expense for ________________ in its income statement that sole traders and partnerships do not have.

Question

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A company is a separate legal entity from its owners and therefore, must pay income taxes on its profits. Sole traders and partnerships are not considered separate entities, and taxes are paid by the individuals on their personal income tax returns. The other options (A, B, D) are expenses that all businesses, including sole traders and partnerships, may have to incur.

A Company Is a Legal Entity and as Such Has