Which of the following statements is CORRECT?
A. It is generally more expensive to form a proprietorship than a corporation because, with a proprietorship, extensive legal documents are required.
B. Corporations face fewer regulations than sole proprietorships.
C. One disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation, at both the firm level and the owner level.
D. One advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.
E. If a regular partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.
Answer: D
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