Which of the following statements is true about the different forms of business?
A)If the firm is organized as a sole proprietorship, the proprietor's personal assets are separable from those of the firm because the firm is a separate legal entity.
B)If the firm is organized as a sole proprietorship, the proprietor has limited liability for the firm's obligations.
C)In general partnership, active partners have unlimited liability, whereas sleeping partners have limited liability.
D)Corporation is a separate legal entity.
E)Corporations have unlimited liability for the firm's obligations.

Question

Quizplus · Accepted Answer

Corporations are recognized as separate legal entities from their owners, which means they can own property, sue or be sued, and enter into contracts independently of their shareholders. This separation provides a layer of protection for the personal assets of the shareholders, distinguishing corporations from other forms of business where owners might have unlimited liability.

Which of the Following Statements Is True About the Different