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goji.go goji.go
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10 years ago
Which of the following is a disadvantage of forming a corporation?
A) unlimited liability of owners
B) difficult transfer of ownership
C) limited life
D) double taxation
E) less flexibility raising capital
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Diesel
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bbb
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#1
10 years ago
D) Corporations provide owners with no liability to any corporate debt, making limited liability an advantage. Shareholders own a corporation, making its existence independent of its founding members and easily transferable and virtually alive forever. Double taxation occurs when taxes are paid twice on the same asset. For example, a corporation is taxed on its net income, which is then redistributed to its owners as dividends. The income from the dividends is taxed again on the owner's personal income tax filings. Therefore, double taxation is a drawback to corporate structure. Although double taxation is a disadvantage, it only affects about 39% of corporations that pay dividends.
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goji.go Authorgoji.go
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10 years ago
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Diesel

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