GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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difficulty of raising financial capital.
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the difficulty and expense of getting a charter
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lack of separate taxes in a partnership
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potential for conflict between partners
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Detailed explanation-1: -3. The primary disadvantage of the corporate form is the double taxation to shareholders of distributed earnings and dividends. Some advantages include: limited liability, ease of transferability, ability to raise capital, unlimited life, and so forth. 4.
Detailed explanation-2: -Answer and Explanation: The main disadvantage of the corporate form of organization is the double taxation of shareholders. The corporation pays corporate taxes and shareholders then pay income taxes on the dividends or capital gains received.
Detailed explanation-3: -Cost to establish and maintain a corporation. Need to observe corporate formalities. Double taxation of income if dividends are paid. Possible tax on excess corporate accumulated earnings.