Question

Which of the following statements is CORRECT?

A) One of the advantages of the corporate form of organization is that it avoids double taxation.
B) It is easier to transfer one's ownership interest in a partnership than in a corporation.
C) One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
D) One of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e., "one person, one vote."

Answer 1

d. One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.

Step-by-step explanation:

Answer 2

C) One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.

Step-by-step explanation:

There is no avoidance to double taxation under corporate form, as company's pays tax on net income earned, and then if there is any distribution of income to shareholders, the shareholders are charged individually.

There is no such ease in transfer of share whether in corporate form or partnership form.

There is an indefinite liability in case of insolvency of sole proprietorship on the sole proprietor, as he is the only person in ownership of such shares.

No, voting rights in a corporate form are dependent on number of shares held.

Therefore, the correct statement is:

C) One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.