What are the main advantages and disadvantages of organizing a firm as a corporation? (Select all the choices that apply.) A. Disadvantages: Double taxation, separation of ownership and control. B. Advantages: Limited liability, liquidity, separation of ownership and control. C. Disadvantages: Double taxation, infinite life. D. Advantages: Limited liability, liquidity, infinite life.

Question

Business

Rubi Krueger

24 October, 08:58

What are the main advantages and disadvantages of organizing a firm as a corporation? (Select all the choices that apply.) A. Disadvantages: Double taxation, separation of ownership and control. B. Advantages: Limited liability, liquidity, separation of ownership and control. C. Disadvantages: Double taxation, infinite life. D. Advantages: Limited liability, liquidity, infinite life.

+4

Answers (1)

Know the Answer?

Nevaeh Villa · Answer 1

A. Disadvantages: Double taxation, separation of ownership and control.

B. Advantages: Limited liability, liquidity, separation of ownership and control.

Explanation:

The corporation has various advantages and disadvantages. Double taxation is a disadvantage of a corporation. The Company pays income tax on its earnings and then shareholders are taxed when the earnings after tax are distributed to then as dividends. The advantage includes that a company has limited liability. The shareholders can only claim the amount they invested in an occasion of bankruptcy or default of a company. The corporations do not have infinite life.