Question

Which of the following statements is CORRECT?one drawback of forming a corporation is that it generally subjects the firm to additional regulations.One drawback of forming a corporation is that it subjects the firm's investors to increased personal liabilities.One drawback of forming a corporation is that it makes it more difficult for the firm to raise capital.One advantage of forming a corporation is that it subjects the firm's investors to fewer taxes.One disadvantage of forming a corporation is that it is more difficult for the firm's investors to transfer their ownership interests.

Answer 1

The correct answer is letter "A": one drawback of forming a corporation is that it generally subjects the firm to additional regulations.

Step-by-step explanation:

Forming a corporation takes several steps from choosing a business name, registering the business name, appointing directors, filing the articles of the corporation, writing the corporate laws, obtaining business permits and licenses to registering with the Internal Revenue Services (IRS) and state and local tax agencies. As portrayed, the biggest disadvantage of the process is the bureaucracy attached to it which also comes with more regulations.