Question

Which of the following statements is CORRECT? a. Corporations of all types are subject to the corporate income tax. b. In any partnership, every partner has the same rights, privileges, and liability exposure as every other partner. c. Proprietorships and partnerships generally have a tax advantage over corporations. d. One of the disadvantages of incorporating your business is that you could become subject to the firm's liabilities in the event of bankruptcy. e. Proprietorships are subject to more regulations than corporations.

Answer 1

Proprietorships and partnerships generally have a tax advantage over corporations is a correct statement.

Answer: Option C.

Explanation:

Proprietorship is a state of holding business single-handedly. Proprietorship is a business that is run by a single person. Partnerships on the other hand is a structure where two or more people own a business and share the common profit. Corporations are usually the companies and the organizations.

When it comes to tax advantage, Proprietorship and Partnership firm have a higher tax advantage over the corporations. The former ones are subject to lower taxes because partnership and proprietorship firms our reason to be the personal incomes. And that is not the case when it comes to corporations because they are running a whole organization.