Which of the following statements is CORRECT? Corporations face fewer regulation

Question

  Which of the following statements is CORRECT?

Corporations face fewer regulations than sole proprietorships.

One disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation, at both the firm level and the owner leve.

One advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.

If a regular partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.

Corporations face fewer regulations than sole proprietorships.

One disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation, at both the firm level and the owner leve.

One advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.

If a regular partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.

Explanation / Answer

Liability of partners is joint and several. Liability is not only to the extent of firm value but extended to personal assets of the partners.

Hence, statement (C) is correct.

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