Answer to Question #11531 in Other Management for Sarah

Question #11531
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.
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Expert's answer
2012-07-06T07:43:04-0400
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.

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