Read the following scenario and answer the question below:

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Phil and Billy are opening a fabric store. There are no competing fabric stores in the area. They must decide how to organize the business. They anticipate profits of $$150,000$ 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.

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By selecting the corporate form of business now, Phil and Billy will

Multiple Choice

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

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

avoid the double taxation that affects partnerships and proprietorships.