Question

which of the following statements is correct?
one of the disadvantages of a proprietorship is that the proprietor is exposed to unlimited liability.
one of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e. \one person, one vote.\
one of the advantages of the corporate form of organization is that it avoids double taxation.
it is easier to transfer ones ownership interest in a partnership than in a corporation.
corporations of all types are subject to the corporate income tax.

Explanation:

1. In a proprietorship, the proprietor's personal assets can be used to satisfy business - related debts, meaning unlimited liability.
2. In a corporation, not all stockholders have equal voting rights. Some stocks may have more voting power than others.
3. Corporations are subject to double - taxation (corporate income tax on profits and then individual income tax on dividends).
4. Transferring ownership in a corporation is generally easier due to the existence of stock markets compared to a partnership.
5. Some corporations like S - corporations are not subject to corporate income tax at the corporate level.

Answer:

One of the disadvantages of a proprietorship is that the proprietor is exposed to unlimited liability.