Which of the following statements is CORRECT? a. Corporations face fewer regulat

Question

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

Explanation / Answer

Answer is e.

Equity investors are usually exposed to less liability than they would be in a partnership.

Hence their personal assets are not at stake when it is a corporation.

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