(TCO A) Which of the following statements is CORRECT? (Points : 10) One of the d

Question

(TCO A) Which of the following statements is CORRECT? (Points : 10)
One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.
Sole proprietorships are subject to more regulations than corporations.
In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.
Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.
Corporations of all types are subject to the corporate income tax.

Explanation / Answer

Sole proprietorships and partnerships generally have a tax advantage over many corporation, especially large ones. This statement is correct.       For example for any sole proprietorships the tax percentage is generallly 13%, for corporation the tax percentage is 40%. For a partnership the tax percentage is in between 13% and 40%.       Therefore Sole proprietorships and partnerships have tax advantage than corporations.

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