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Which one of the following statements is true? a. A sole proprietor has limited liability. b. A disadvantage of a sole proprietorship is double taxation. c. In a general partnership, partners face limited liability d. A disadvantage of a corporation is that complex management structure lead to slower and expensive decision-making. Which of the following is not a institutional shareholder of a corporation? a. Individual person. b. Corporation. c. Securities companies. d. Financial intermediary.
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a) Sole proprietor has limited liability - false, since the sole proprietor is liable for any liabilities or debts. He is having unlimited liability. b) Disadvantage of sole proprietorship is double taxation false, as Sole proprietorships are not considered tax entities separate from their owners, so owners do not face double taxation. c) In general partnership, partners face limited liability -false, All of the partners in a general partnership have unlimited liability, which means that the partners are equally responsible for the entire debts of the business. d) Disadvantage of corporation is that complex management structures lead to slower and expensive decision making- true, as corporations is of a complex structures its decision making process will be slower Answer is Option d) Institutional shareholders are big investors whose investment in share capital of corporations will be of huge amounts and those includes banks, insurance companies, mutual funds, securities companies, Intermediaries etc. Institutional shareholders dont include individual investors. Answer is Option a)

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