Which of the following could explain why a business might choose to operate as a

Question

Which of the following could explain why a business might choose to operate as a corporation rather than as a sole proprietorship or a partnership?


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.

Explanation / Answer

C

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