Question

$15,200 200 1,000 550 960 Exercise 1-1 Indicate in the space by letter whether each statement below applies to a sole proprietorship (S), partnership (P), or corporation (C). More than one answer may be appropriate. P a. Simple to establish P b. Shared control. c. Easy to transfer ownership. d. No personal liability. p e. Tax advantage f. Easier to raise funds.

Answer 1

(A) Simple to establish -   sole proprietorship (S) ( because in sole proprietorship no document , forms or extra formalities are needed which is required in case of corporation or partnership form of business,any person can begin with his own name and he is personally liable  for all risk and reward)

(B) shared control - Partnership (P) (partnership is that form of business where there is formal agreement between two or more people to share ownership , responsibility ,control and profit and  losses  of the company )

(C) Easy to transfer ownership - Corporation (C) ( because in C-corporation have unlimited number of shareholders,so Ownership is easily transferable through the sale of stock

(D) No personal liability -corporation (C) ( P or S has unlimited liability but Corporation is a separate legal entity and distinct from  its owners and they not personally liable for the company's debts or liabilities.)

(E) Tax advantage - sole proprietorship (S)

(F) Easier to raise funds - Corporation (C) ( Corporation has easier to raise funds as compare to P or S because it has various sources of raising funds for example bank loans, personal loans, bonds,sale of shares of stock etc)