In Regard to the Quest of Wally and Sally to Find

question 29

Multiple Choice

In regard to the quest of Wally and Sally to find the best form of business organization,which of the following is true?

• A) An S corporation provides the tax advantages of a partnership but does not avoid personal liability for shareholders.
• B) A limited liability company combines the tax advantages of a partnership with the limited liability of a corporation.
• C) A double sole proprietorship avoids corporate double taxation and also shields assets of the owners from tort claims of third parties although creditors may reach the personal assets of the owners.
• D) An unincorporated cooperative combines the tax advantages of a partnership with the limited liability of a corporation.
• E) A joint venture is a type of undertaking involving joint stock which is treated as a corporation in regard to double taxation and limited liability.

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Definitions:

Option

A financial derivative that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price within a specified time.

American Call Option

A financial agreement granting the purchaser the option, yet not the compulsion, to purchase a stock, bond, commodity, or any asset at a predetermined price within a defined time frame.

Expiration Date

The date on which an option, futures contract, or insurance policy loses its validity or expires.