A disadvantage of the corporate form of business entity is


Asked by admin @ in Business viewed by 245 People


One disadvantage of the corporate form of business ownership is the: Group of answer choices limited liability of its shareholders for the firm's debts. double taxation of dividends paid to shareholders. firm's greater ability to raise capital than other forms of ownership. firm's potential for an unlimited life. firm's ability to issue additional shares of stock.

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Answer:

double taxation of dividends paid to shareholders

Explanation:

A company can either be a corporation, sole proprietorship, or a limited liability company. The decision of choosing the type of business lies on expected rate of growth, present situation, and preference.

A corporation has a higher ability to get funds because it can sell shares to get funding for its operations. Those that buy shares are called shareholders.

However it has disadvantage of having double taxation of its profit. Profit is taxed by federal and state government. When dividend is paid it is again taxed as income tax


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