Which of the following statements is correct? Select one: O a. One disadvantage

Question

Which of the following statements is correct? Select one: O a. One disadvantage of operating a business as a sole proprietor is that the firm is subject to double taxation, because taxes are levied at both the firm level and the owner level. O b. If a partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business. O c. Corporations face fewer regulations than sole proprietorships. O d. One advantage of forming a corporation is that equity investors are usually exposed to less liability than in a partnership. O e. It is generally less expensive to form a corporation than a proprietorship because, with a proprietorship, extensive legal documents are required.

Explanation / Answer

In sole proprietorship, taxation is at individual level only

Partner liability extends beyond his investment

Corporations face more ragulation than sole proprietorships and are more expensive

Correct choice C

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