Question

Which of the following statements is CORRECT? a. Corporate shareholders are exposed to unlimited liability, but this factor is offset by the tax advantages of incorporation. b. There is a tax disadvantage to incorporation, and there is no way any corporation can escape this disadvantage, even if it is very small. c. It is usually easier to transfer ownership in a corporation than in a partnership. d. Corporate shareholders are exposed to unlimited liability. e. Corporations generally face fewer regulations than proprietorships.

Answer 1

c. It is usually easier to transfer ownership in a corporation than in a partnership

Step-by-step explanation:

(A) (D) Shareholders has limited liability. It is the partnership members which has unlimited liability.

(E) Corporations, because manage large sum of capital are more regulated.

(B) Corporation can lobby to get tax exemption, also the income tax scales with income, not with business legal form. There is no tax disadvantage

(C) In a Corporation you can sale your shares (right of ownership) any time in open market. While in a partnership there are restrictions from you leaving right away.