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Which of the following statements is CORRECT? a. Most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is

Which of the following statements is CORRECT?

a. Most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is easier to set up and operate in one of these forms rather than as a corporation. However, if the business gets very large, it becomes advantageous to convert to a corporation, mainly because corporations have important tax advantages over proprietorships and partnerships.

b. Attracting large amounts of capital is less difficult for partnerships than for corporations.

c. A slow-growth company, with little need for new capital, would be more likely to organize as partnerships or proprietorships than would a faster growing company.

d. A major disadvantage of all partnerships compared to all corporations is the fact that federal income taxes must be paid by the partners rather than by the firm itself.

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