Reference no: EM131548006

1. Which of the following statements is CORRECT?

a. Corporations of all types are subject to the corporate income tax.

b. 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."

c. One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.

d. It is generally easier to transfer one's ownership interest in a partnership than in a corporation.

e. One of the advantages of the corporate form of organization is that it avoids double taxation.

2. Which of the following statements is CORRECT?

a. Corporate shareholders are exposed to unlimited liability.

b. Corporations generally face fewer regulations than sole proprietorships.

c. It is usually easier to transfer ownership in a corporation than it is to transfer ownership in a sole proprietorship.

d. Shareholders in a regular corporation (not an S corporation) pay higher taxes than owners of an otherwise identical proprietorship.

e. Corporate shareholders are exposed to unlimited liability, and this factor may be compounded by the tax disadvantages of incorporation.