A primary disadvantage of the corporate form of organization is:

a. Corporation may continue its operations without disruption despite retirement of individual stockholders.

b. Unlimited personal liability for business debts.

c. Corporate earnings are subject to double taxation.

d. Ownership is difficult to transfer.

Question

Business

Ferguson

21 December, 04:13

A primary disadvantage of the corporate form of organization is:

a. Corporation may continue its operations without disruption despite retirement of individual stockholders.

b. Unlimited personal liability for business debts.

c. Corporate earnings are subject to double taxation.

d. Ownership is difficult to transfer.

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Answers (1)

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Maurice Ewing · Answer 1

Corporate earnings are subject to double taxation.

Explanation:

A corporation can be defined as a business that is owned by its shareholders. These various shareholders have the responsibility of putting in place board of directors to supervise the daily activities of the organization.

The ownership of a corporation by shareholders is fully represented by their shares of stock.

Corporate form of business organization assures the owners of their personal asset protection. Various organisations operating in a corporate form find it easier to borrow money, this provides a wide opportunity for the growth of the company.