Your Three Friends from Wyoming Inherited an Old Dude Ranch

question 118

Multiple Choice

Your three friends from Wyoming inherited an old dude ranch. They now plan to turn it into a pasture for retired racehorses. Serenity Stables wants to open its doors by spring of 2020. After going to several small business seminars, your friends are certain they need limited liability. The high-risk, labor-intensive business will require a sizeable investment including an air-conditioned barn, several fenced-in pastures, and loads of animal feed. You explain to them that LLC ownership requires owners to pay self-employment taxes on the entire amount of earnings. You are fairly certain this is one tax liability your friends would like to avoid. You instead recommend

• A) sole proprietorship.
• B) general partnership.
• C) limited liability company.
• D) S corporation.

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Definitions:

On-Demand Service Provider

A company that offers goods or services in real-time or on request, typically through a digital platform.

Virtual Private Network

A technology that creates a safe and encrypted connection over a less secure network, such as the internet.

Wide Area Network

A Wide Area Network (WAN) is a telecommunications network that extends over a large geographical area, connecting computers and smaller networks to each other.

Extranet

A private network that uses Internet protocols and the public telecommunication system to securely share part of a business's information or operations with suppliers, vendors, partners, customers, or other businesses.