Which of the Following Statements Is Incorrect About LLCs and the Check-The-Box

question 30

Multiple Choice

Which of the following statements is incorrect about LLCs and the check-the-box Regulations?

• A)If a limited liability company with more than one owner does not make an election, the entity is taxed as a corporation.
• B)All 50 states have passed laws that allow LLCs.
• C)An entity with more than one owner and formed as a corporation cannot elect to be taxed as a partnership.
• D)If a limited liability company with one owner does not make an election, the entity is taxed as a sole proprietorship.
• E)A limited liability company with one owner can elect to be taxed as a corporation.

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Definitions:

Undue Hardship

A principle that exempts an employer from providing accommodations that would result in significant difficulty or expense under the Americans with Disabilities Act.

Noncompetition Clause

A provision in a contract that prevents one party from entering into or starting a similar profession or trade in competition against another party.

Unenforceable

A term describing a contract or clause that, due to illegalities or other issues, cannot be legally upheld or enforced by a court.

Illegal Contract

A contract that involves doing something that is against the law or against public policy, and therefore is unenforceable in a court of law.