Dori and Matt Will Be Equal Owners of a New

question 563

Multiple Choice

Dori and Matt will be equal owners of a new business and will be making cash contributions to start up the business. They expect substantial losses in the early years so the business will take out a loan from the bank which Dori and Matt will have to guarantee. For tax purposes, the preferred business form for these early years will be

• A) a C corporation.
• B) an LLC, taxed as a partnership.
• C) an S corporation.
• D) either an S corporation or an LLC (partnership). The owners will be indifferent between these two forms.

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Definitions:

Altruism

An unselfish interest in helping another person.

Moral Development

The way in which individuals acquire suitable dispositions and conduct towards fellow members in a society, guided by the norms, regulations, and laws of the culture and society.

Lawrence Kohlberg

A psychologist known for his theory on the stages of moral development.

Emerging Adulthood

A phase of the life span between adolescence and full-fledged adulthood that encompasses late teens through twenties, characterized by exploration and instability.