Canadian Securities Course (CSC) Level 1 Practice Exam

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List the 4 disadvantages to incorporation

Inflexibility
Tax benefits
Expense
Capital Withdrawal

The correct answer is: Inflexibility

The correct answer is A: Inflexibility. Incorporation can indeed bring some disadvantages, such as reduced flexibility in decision-making due to the requirement to follow regulations and laws governing corporations. Other disadvantages of incorporation include the cost associated with setting up and maintaining a corporation (option C: Expense), potential limitations on withdrawing capital from the business (option D: Capital Withdrawal), and certain tax implications that may not always result in benefits (option B: Tax benefits).