Which of the following could explain why a business might choose to operate as a corporation rather than as a sole proprietorship or a partnershipσ
A) corporations generally find it relatively difficult to raise large amounts of capital.
B) less of a corporation's income is generally subjected to taxes than would be true if the firm were a partnership.
C) corporate shareholders escape liability for the firm's debts, but this factor may be offset by the tax disadvantages of the corporate form of organization.
D) corporate investors are exposed to unlimited liability.
E) corporations generally face relatively few regulations.

Question

Quizplus · Accepted Answer

One advantage of operating as a corporation is that shareholders are not personally liable for the firm's debts and liabilities. However, corporations face tax disadvantages, such as double taxation, which means that both the corporation and its shareholders must pay taxes on the firm's profits.

Which of the Following Could Explain Why a Business Might