Which of the following statements is most correct one of the advantages of the corporate form of organization is that there is no double taxation?

Your company is a tax resident of Singapore when its control and management is exercised in Singapore.

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Control and Management
Foreign-Owned Investment Holding Companies
Non-Singapore Incorporated Companies and Singapore Branches of Foreign Companies
How Tax Residency Affects Corporate Income Tax
Certificate of Residence
Sole Proprietorship
Partnerships-General and Limited
Limited Liability Company (LLC)
Corporation
Small Business Corporation (S-Corporation)
Advantages/Disadvantages
Sole Proprietorship
Partnership
Limited Liability Company
Corporation/S-Corporation
Which of the following statements is correct A One of the advantages of the corporate form of organization is that it avoids double taxation?
Which of the following is an advantage of the corporate form of organization?
Which of the following is one of the advantages of forming a corporation?
Which of the following are advantages of the corporate form of business ownership?

Control and Management

Under Singapore tax law, the tax residency of a company is determined by where the business is controlled and managed. The residency status of a company may change from year to year.

Generally, a company is considered a Singapore tax resident for a particular Year of Assessment (YA) if the control and management of its business was exercised in Singapore in the preceding calendar year. For example, a company is a Singapore tax resident for YA 2022 if the control and management of its business was exercised in Singapore for the whole of 2021.

A company is a non-resident when the control and management of its business is not exercised in Singapore.

'Control and management' is defined as the making of decisions on strategic matters, such as those concerning the company’s policy and strategy. Where the control and management of a company is exercised is a question of fact.

Usually, the location of the company's Board of Directors meetings where strategic decisions are made determines where the control and management is exercised. Under certain scenarios, holding Board of Directors meetings in Singapore may not be sufficient and IRAS will consider all facts provided by the company to determine if the control and management of the business is indeed exercised in Singapore.

Some examples of scenarios where the control and management of a company may be considered not exercised in Singapore include:

There is no board of directors meeting held in Singapore. Instead, the directors’ resolutions are merely passed by circulation
The local director is a nominee director while the rest of the directors are based outside Singapore
No strategic decisions are made by the local director in Singapore
No key employees are based in Singapore

The place of incorporation of a company is not necessarily indicative of the tax residency of a company.

Foreign-Owned Investment Holding Companies

Foreign-owned investment holding companies1, with purely passive sources of income or receiving only foreign-sourced income, are generally not considered tax residents of Singapore because these companies usually act on the instructions of its foreign companies/ shareholders.

However, they may still be treated as Singapore tax residents if they can satisfy certain conditions.

Non-Singapore Incorporated Companies and Singapore Branches of Foreign Companies

Non-Singapore incorporated companies and Singapore branches of foreign companies are controlled and managed by their foreign parent. They are not considered tax residents of Singapore.

However, they may still be treated as Singapore tax residents if they can satisfy certain conditions.

How Tax Residency Affects Corporate Income Tax

While tax resident and non-resident companies are generally taxed in the same manner, tax resident companies enjoy certain benefits, such as:

Exemption or reduction in tax imposed on specified foreign income that is derived in a jurisdiction that has an Avoidance of Double Taxation Agreement (DTA) with Singapore
Tax exemption on specified foreign income such as foreign-sourced dividends, foreign branch profits, and foreign-sourced service income under Section 13(8) of the Income Tax Act 1947
Foreign tax credit for the taxes paid in the foreign jurisdiction against the Singapore tax payable on the same income
Tax exemption for new start-up companies

Certificate of Residence

The Certificate of Residence (COR) is a letter issued by IRAS to certify that the company is a tax resident of Singapore for the purpose of claiming tax benefits under the DTAs that Singapore has concluded with other jurisdictions. It is generally required by the foreign tax authority to prove that the company is a Singapore tax resident.

Learn how to apply for a COR.

Sole Proprietorship

This is a business run by one individual for his or her own benefit. It is the simplest form of business organization. Proprietorships have no existence apart from the owners. The liabilities associated with the business are the personal liabilities of the owner, and the business terminates upon the proprietor's death. The proprietor undertakes the risks of the business to the extent of his/her assets, whether used in the business or personally owned.

Single proprietors include professional people, service providers, and retailers who are "in business for themselves." Although a sole proprietorship is not a separate legal entity from its owner, it is a separate entity for accounting purposes. Financial activities of the business (e.g., receipt of fees) are maintained separately from the person's personal financial activities (e.g., house payment).

Partnerships-General and Limited

A general partnership is an agreement, expressed or implied, between two or more persons who join together to carry on a business venture for profit. Each partner contributes money, property, labor, or skill; each shares in the profits and losses of the business; and each has unlimited personal liability for the debts of the business.

Limited partnerships limit the personal liability of individual partners for the debts of the business according to the amount they have invested. Partners must file a certificate of limited partnership with state authorities.

Limited Liability Company (LLC)

An LLC is a hybrid between a partnership and a corporation. Members of an LLC have operational flexibility and income benefits similar to a partnership but also have limited liability exposure. While this seems very similar to a limited partnership, there are significant legal and statutory differences. Consultation with an attorney to determine the best entity is recommended.

Corporation

A corporation is a legal entity, operating under state law, whose scope of activity and name are restricted by its charter. Articles of incorporation must be filed with the state to establish a corporation. Stockholders' are protected from liability and those stockholders who are also employees may be able to take advantage of some tax-free benefits, such as health insurance. There is double taxation with a C corporation, first through taxes on profits and second on taxes on stockholder dividends (as capital gains).

Small Business Corporation (S-Corporation)

Subchapter S-corporations are special closed corporations (limits exist on the number of members) created to provide small corporations with a tax advantage, if IRS Code requirements are met. Corporate taxes are waived and reported by the owners on their individual federal income tax returns, avoiding the "double taxation" of regular corporations.

Advantages/Disadvantages

Sole Proprietorship

Simplicity of organization-this is the most common form of business organization in the United States because it is the easiest and least expensive to establish.
Minimum legal restriction-fewer reports have to be filed with government agencies. There are no charter restrictions on operations.
Ease of discontinuance-the business can be terminated at the will of the owner.
The owner is truly the boss, making all decisions, keeping all profits, and assuming responsibility for all losses and debts.
Difficulty in raising capital-this can be a problem since an individual's resources are typically less than the pooled resources of partners.
Limited life of the business-untimely, unanticipated, or unplanned removal of the proprietor from the operation of the business may have ramifications for creditors.
Unlimited liability-this is by far the greatest disadvantage to the proprietorship. Even though proprietors may invest only part of their capital in the business, they remain personally liable to the full extent of their assets for the liabilities of the business.

Partnership

Greater possible capital availability
Greater resources for decision making, support, creative activity
Unlimited liability in general partnerships
Divided authority-having to divide the authority for making decisions among the partners can delay the decision-making process and occasionally lead to disagreement.

Limited Liability Company

Allow greatest flexibility for customizing the structure of the business
Limits member liability
In many states, an LLC may have only one member (have the benefits of a sole proprietorhop but limits liability).
Requires comprehensive operating agreement because of the high degree of variability/flexibility

Corporation/S-Corporation

Limited liability to stockholders-liability is limited up to the amount invested personally in the business. In addition, personal assets may not be seized by creditors to satisfy debts (although now creditors often request personal guarantees on business loans).
Perpetual life-the business continues as a legal entity. Shares in the corporation can be passed on to heirs.
Ease of transferring ownership-stockholders can sell their shares when they desire, if there is a market.
Ease of expansion of the company-greater capacity to raise capital by legal sale of stock.
Government regulation-a corporate charter must be obtained from the state, and the corporation is subject to all state and record keeping regulations that pertain to corporations.
Costs to organize a corporation are higher.
Unless permission is obtained from other states, the corporate charter restricts operation to the state where it was issued.
Double taxation feature unless S-Corporation election is made.

Which of the following statements is correct A One of the advantages of the corporate form of organization is that it avoids double taxation?

TF: One advantage of the corporate form of organization is that it avoids double taxation. False: Corporations have double taxation. Proprietorships and partnerships do not have double taxation.

Which of the following is an advantage of the corporate form of organization?

Answer and Explanation: An advantage of the corporate form of business organization is c. limited liability. A corporation is a separate legal entity and shareholders are only liable to the extent of their ownership.

Which of the following is one of the advantages of forming a corporation?

The correct answer is a. One advantage of forming a corporation is that you have limited liability. A corporation is a separate legal entity from its owners. In case of bankruptcy, the liability of shareholders is limited to the amount of capital provided.

Which of the following are advantages of the corporate form of business ownership?

The corporate form of organization offers several advantages, including limited liability for shareholders, greater access to financial resources, specialized management, and continuity.