Which of the Following Is a Difference Between a Subchapter

question 75

Multiple Choice

Which of the following is a difference between a Subchapter S corporation and a limited liability company?

• A) A Subchapter S corporation has no limitation on number of members, whereas a limited liability company limits ownership interests to no more than 35 shareholders.
• B) In a Subchapter S corporation, each owner has unlimited personal liability for debts of the organization, whereas in a limited liability company, liability of the owners is limited to loss of capital contribution.
• C) In a Subchapter S corporation, profits are taxed to owners as ordinary income and losses are deducted by them, whereas in a limited liability company, profits are taxed as income to corporation and again as income to owners when distributed as dividends.
• D) A Subchapter S corporation does not allow the owners control over daily management decisions, whereas a limited liability company does.

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