Which of the Following Is a Reason to Form a Limited

question 69

Multiple Choice

Which of the following is a reason to form a limited liability company rather than an S corporation?

• A) There is no limit on the number of owners of a limited liability company,whereas the number of shareholders of an S corporation is limited.
• B) All owners of a limited liability company have limited liability,but not all owners of an S corporation have limited liability.
• C) A limited liability company can be formed without formalities such as filing papers with the state,whereas an S corporation requires papers to be filed with the state.
• D) A limited liability company acts as a flow-through entity for income tax purposes,but an S corporation does not.

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Definitions:

Securities Act

A U.S. federal law enacted in 1933 that governs the first sale of securities (stocks, bonds) to the public, requiring disclosure and registration.

Public Securities

Public Securities are financial instruments issued by governments or municipalities, such as bonds or notes, that are available for purchase by the public.

United Delivery

A generic term possibly referring to a delivery or courier service that operates on a uniform or nationwide basis.

Corporate Outsiders

Individuals or entities that are not directly involved in the internal management or operations of a corporation, such as investors or the general public.