Question

Which one of the following statements is correct?

a. A general partnership is legally the same as a corporation.
b. Income from both sole proprietorships and partnerships that is taxable is treated as individual income.
c. Partnerships are the most complicated type of business to form.
d. All business organizations have bylaws.
e. Only firms organized as sole proprietorships have limited lives.

Answer 1

Answer:

b. Income from both sole proprietorship and partnerships that is taxable is treated as individual income.

Explanation:

The correct choice is b according to the following statements. Because income from both the sole proprietorship and the partnership is treated as individual income because there are no specific tax levels or separate tax rates, the income generated in these types of business should be reported in their individual income tax returns.

Therefore, all other statements given are wrong as a general partnership is completely different from the company plus partnership is not the most complicated type of business. Not all business organizations have by-laws nor limited lives for sole ownership, but the partnership has also limited lives.