You started your business as a partnership. Now your partners and you have decided to convert the business into a regular corporation. Assume that the firm is profitable (positive EBIT and EBT). Which of the following statements is CORRECT?
A smaller percentage of your firm's income will be subject to federal income taxes.
Your firm will face to fewer state and federal regulations.
You and other shareholders (the ex-partners) of the firm will now be exposed to less liability against personal wealth outside of the investment in the firm.
The equity investors will be exposed to less liability, but they will find it more difficult to transfer their ownership.
You will find it more difficult to raise additional capital for the firm.