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3 April, 10:36

Josh and Joe are opening a copy store. There are no competing copy stores in the area. They must decide how to organize the business. They anticipate profits of $550,000 the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow. They feel the corporate form of operation will be best for the long term. They seek your advice

By selecting the corporate form of business now, Josh and Joe will

(A) avoid the double taxation that affects partnerships and proprietorships.

(B) be able to transfer ownership without affecting the continuity of the company.

(C) benefit from the ability to exercise mutual agency within a corporation.

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  1. 3 April, 14:17
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    (B) be able to transfer ownership without affecting the continuity of the company

    Explanation:

    The corporate form of business has many advantages incuding the ability to transfer ownerhip without affecting the continuity of the business (the selling of shares). This is the case as the business is seperate from its owners. The business is a legal entity that own properties, and also carry' s out allot of activities on its own. This is not the case with sole proprietorship and partnership where the owners and the business are one and the same and the owners could be personally liable for its debts.
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