Which of the following statements is CORRECT? One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt. Sole proprietorships are subject to more regulations than corporations. Sole proprietorships are subject to more regulations than corporations. In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner. Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones. Corporations of all types are subject to the corporate income tax. Cheers Inc. operates as a partnership. Now the partners have decided to convert the business into a regular corporation. Which of the following statements is CORRECT? Assuming Cheers is profitable, less of its income will be subject to federal income taxes. Cheers will now be subject to fewer regulations. Cheers' shareholders (the ex-partners) will now be exposed to less liability. Cheers' investors will be exposed to less liability, but they will find it more difficult to transfer their ownership. Cheers will find it more difficult to raise additional capital. Which of the following statements is CORRECT? The main method of transferring ownership interest in a corporation is by means of a hostile takeover. Two key advantages of the corporate form over other forms of business organization are unlimited liability and limited life. A corporation is a legal entity that is generally created by a state; its life and existence is separate from the lives of its individual owners and managers. Limited liability of its stockholders is an advantage of the corporate form of organization, but corporations have more trouble raising money in financial markets because of the complexity of this form of organization. Although its stockholders are insulated by limited legal liability, the corporation's legal status does protect the firm's managers in the same way; i.e., bondholders can sue its managers if the firm defaults on its debt, even if the default is the result of poor economic conditions. Which of the following statements is CORRECT