The major disadvantages of forming a business under a _____ structure is that there is double taxation of profits, and the cost of forming the business and operating the business is higher than other structures.
A) Sole proprietorships
B) General partnerships
C) Subchapter S corporations
D) Limited liability corporations
E) C corporations

Question

Quizplus · Accepted Answer

C corporations are subject to double taxation because the corporation itself pays taxes on its income, and then shareholders also pay taxes on any dividends they receive. Additionally, the cost of forming and operating a C corporation is generally higher than other business structures due to regulatory requirements, legal fees, and administrative costs.

The Major Disadvantages of Forming a Business Under a _____