Disadvantages of starting and running corporation

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Reference no: EM132224160

1. When Henry started up his corporation, he also had to consider the disadvantages of starting and running a corporation. What are some of the disadvantages?

A-His corporation makes it harder to secure funding.

B-His corporation creates double taxation.

C- His corporation has limited liability.

D-His corporation makes it harder to attract qualified employees.

2. You get in a conversation with a man in the reception room at your doctor's office. He tells you he is establishing a barbershop business and has a business partner who shares in all decision making. The business has been fairly easy to set up, he has limited liability for the company and will only be taxed once on company profits. What kind of business has your new acquaintance described to you?

A-C Corporation

B-Limited Liability Company

C-General Partnership

D-Limited Liability Partnership

3. Your sister formed her business as an LLC to protect herself from personal liability. At the same time she opens her business, the economy takes a dive and her business fails with many business debts remaining. Which of the following circumstances would make your sister personally liable for her business's debts?

A-She signed documents personally securing the debts of the business.

B-She did not have sufficient experience to make good decisions on behalf of the business.

C-She defaulted on her loan from the Small Business Administration.

D-Customers did not buy the goods that her business produced and now she must pay back her suppliers.

4. Which type of company enjoys the benefit of passing along deductions and credits of the company on to partners to file on their individual tax returns? The credits and deductions of this type of business entity are divided by the percentage of individual interest each partner has in the company.

A-LLCs

B-Limited Liability Partnerships

C-General Partnership

D-S Corporation

Reference no: EM132224160

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