Answer to Question #11531 in Management for Sarah

Question

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.

Answer 1

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.