What are the advantages of setting up a proprietorship or partnership as opposed to a corporation?
What will be an ideal response?
Ease of formation and owners have control.
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Profits earned by subsidiary are taxed even if it is not repatriated to the parent company as dividends because they are considered as income for the parent company.
A. True B. False C. Uncertain
Which of the following statements about business organizations is TRUE?
A) Partnerships are more common than proprietorships and are responsible for a larger percentage of business receipts. B) Proprietorships are more common than either partnerships or corporations but are responsible for the smallest share of total business receipts. C) Corporations are larger in number than either proprietorships or partnerships and also receive a larger percentage of total business receipts. D) Partnerships are larger than both proprietorships and corporations but are less numerous than corporations.
If a business makes the determination that an investment makes sense at the current interest rate, but before they can act, the interest rates fall
A. they will go ahead with the investment because interest rates have nothing to do with whether an investment makes sense. B. it will only make the situation better, so they will clearly make the investment. C. it will cause them to not make the investment regardless of the decrease. D. they will have to recalculate whether it still makes sense.
When a good is not excludable but is rival in consumption the:
A. good is likely a private good. B. free rider problem may arise. C. good is likely a common resource. D. tragedy of the commons may arise.