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.

Comprehend the concepts and financial implications of corporate actions including mergers, acquisitions, divestitures, and spin-offs.

Recognize the financial instruments and strategies used in raising funds including private placements, public offerings, and leveraged buyouts.

Analyze the impact of financial decisions on a company's risk, liquidity, and leverage.

Understand the functions and responsibilities of financial and accounting managers within a corporation.

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Definitions:

Intended Meaning

The meaning or interpretation that a communicator aims to convey to the listener or reader.

Feedback

Communicates how one feels about something another person has done or said.

Communicates

The process of transmitting information, ideas, emotions, skills, or knowledge from one entity to another through various means.

Returning

The act of going back to a previous position, condition, or activity.