Question

What are the main advantages and disadvantages of organizing a firm as a C​ corporation? The advantages​ are: ​(Select all the choices that​ apply.) A. There is no limit on the number of owners a C corporation may​ have, thus allowing the corporation to raise substantial amounts of capital. B. The life of the business can continue beyond the death of any of the owners. C. The corporation can use the assets of the owners to pay for corporate liabilities. This attracts smaller investors to the corporation. D. The liability of the owners is limited to the amount of their investment in the firm. The disadvantages​ are: ​(Select all the choices that​ apply.) A. Income to a C corporation is subject to double​ taxation, once at the corporate level and again when received by the owners in the form of a dividend. B. The life of the business usually ends with the death of any of the owners. C. The C corporation is more complicated and more expensive to set up than other business entities. D. Corporate liabilities can be passed on to the​ shareholders, thus making stock ownership primarily the realm of wealthy investors.

Answer 1

Answer:

Advantages: Statement A, B and D

Disadvantages: Statement A, and C

Explanation:

C Corporations are the form of organization where the capital is raised through issue of equity.

With this there comes advantages and disadvantages!

There can be endless number of investors, holding equity shares of company.

This helps in arranging funds for the company.

Further, the corporate tax rate is higher, but since it is in benefit for the organisation in lot other matters it chooses this form of organization.

Life of business does not depend upon life of individual investors.

Thus, chosen statements clearly define the benefits and disadvantages of C form of Corporation.