In: Finance
All of the following are advantages of a corporation except:
Group of answer choices
unlimited life
ease of ownership transfer
limited liability
double taxation
ease of raising money in the financial markets
Answer :-
Double taxation
Explanation :-
Double taxation is not an advantage of a corporation , infact it is a disadvantage . Double taxation means that the tax is levied twice on the income to the shareholders of the corporation . Corporation pay taxes on the profit and after paying taxes , corporation pays dividends to the shareholders. And the shareholders also have to pay taxes on personal level. So, the corporation and shareholders both have to pay taxes so, double taxation is a disadvantage .
Exception for rejection of other options :-
All other options are advantages of corporation :-
Unlimited life :- a corporation is not limited to the life of its share holders so, a corporation has unlimited life .
Ease of ownership transfer :- In a corporation , ownership can be easily transferred by transferring the shares of the corporation .
Limited liability :- shareholders of corporation are can not be held personally liable to pay corporation debt in case of insolvency . So, limited liability is also an advantage .
Ease of raising money in financial market :- corporation raise money by issuing securities like shares , bonds so, it can easily raise money from financial market .