1. Anthony and Ian are in the process of setting up their own company. They are considering making it either as a partnership or as a corporation. Eventually they decide to set up the company as a separate legal entity, meaning that they have no personal liability for the firms debt. They will share ownership of that firm on a 50-50 basis. Which of the following statements are correct de scriptions of their business?

i. The form of their company is partnership.

ii. If their firm is located in the United States, Anthony and Ian should be con cerned of the double-taxation problem, which means both the interest expense and the dividends are taxed by the government.

iii. In the event of bankruptcy, Anthony and Ian may lose all their investment since they are last in line to get back their stakes.

(A) i, ii, and iii

(B) i and iii

(C) ii and iii

(D) iii only

D is the answer. I woud like to know why ii is false.