Answer to Question #11531 in Other Management for Sarah
Which of the following statements is CORRECT?
a. One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
b. It is generally easier to transfer one’s ownership interest in a partnership than in a corporation.
c. One of the advantages of the corporate form of organization is that it avoids double taxation.
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.”
e. Corporations of all types are subject to the corporate income tax.
Correct answer is “A”, because sole proprietor receives all profits and has unlimited responsibility for all losses and debts. B is wrong, because there could be different types of partnerships that differ in partners’ rights. C is wrong, because not all countries set bilateral agreements to avoid double taxation; D is wrong, because in some cases a stockholder has more than one vote during General Meeting; E is wrong, because some entities don’t pay corporate income tax.