Which of the following statements is most accurate in regarding corporations?
A) Due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of businesses are organized as corporations.
B) Due to legal considerations related to ownership transfers and limited liability, most business is conducted by corporations in spite of large corporations' often less favourable tax treatment.
C) Large corporations are taxed more favourably than sole proprietorships.
D) Corporate stockholders are exposed to unlimited liability.

Question

Quizplus · Accepted Answer

The statement acknowledges that corporations are favored due to their limited liability, but also indicates that legal considerations related to ownership transfers play a major role in why businesses are conducted as corporations. It also alludes to the fact that large corporations may not always have the most favorable tax treatment. Option A is inaccurate because while corporations are common, they do not make up the vast majority of businesses. Option C is incorrect, as large corporations are typically subject to higher taxes than smaller businesses, and Option D is false because stockholders in corporations are not personally liable for the company's debts.

Which of the Following Statements Is Most Accurate in Regarding