Question

In: Finance

Which statements are true? Check all that apply: It is impossible to sell a part of...

Which statements are true?

Check all that apply:

It is impossible to sell a part of your ownership stake in a sole proprietorship.

A sole proprietorship is subject to few government regulations.

A sole proprietorship is easy to set up.

All profits from a sole proprietorship are passed through to the owner for paying taxes.

A sole proprietorship offers limited liability.

A limited liability company is taxed like a _____ and its owners have _____ liability.

partnership; limited

partnership; unlimited

corporation; unlimited

corporation; limited

Which statements are true about partnerships?

Check all that apply:

Partnerships make it easy to raise large amounts of capital.

A partnership is easy to set up.

All profits from a partnership are passed through to the partners for paying taxes.

Partners have unlimited liability.

What are advantages of a corporation over a partnership?

Check all that apply:

Easier fundraising

Lower taxes

Limited liability

Unlimited life

Solutions

Expert Solution

It is impossible to sell a part of your ownership stake in a sole proprietorship - applicable because selling a stake would convert it into a partnership

A sole proprietorship is subject to few government regulations - applicable. There are very few regulations applicable

A sole proprietorship is easy to set up.

All profits from a sole proprietorship are passed through to the owner for paying taxes.

A sole proprietorship offers limited liability - does not apply. There is unlimited liability

A limited liability company is taxed like a _partnership____ and its owners have _limited____ liability.

Partnerships make it easy to raise large amounts of capital - false. They can raise limited capital

A partnership is easy to set up.- true. Ease of formation is a feature of partnerships

All profits from a partnership are passed through to the partners for paying taxes - false. Profits are taxed in the hands of the partnership, and the tax-paid profits are passed through to partners

Partners have unlimited liability. - true. Partners liability is unlimited

What are advantages of a corporation over a partnership?

Easier fundraising - false. Fundraising for corporations is more cumbersome

Lower taxes - false. Corporations are subject to higher taxes

Limited liability - true.

Unlimited life - true. Death or retirement of shareholders does not end the life of the corporation

jeff jeffy answered 2 months ago
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