Which of the following is a disadvantage of operating as a company?

The disadvantage of operating as a company is that it can be costly to incorporate and manage. This includes expenses related to legal fees, registration fees, and ongoing compliance costs associated with corporate governance and reporting requirements. Companies must adhere to specific regulations and maintain proper accounting records, which can increase overall operational costs.

This is particularly significant for small businesses that might find these costs burdensome compared to simpler business structures such as sole proprietorships or partnerships, which typically involve less regulatory oversight and lower startup and management costs. As a result, while there are benefits to operating as a company, the financial implications of becoming and remaining compliant can be a notable downside.