Which of the Following Observations Is True of an S

question 59

Multiple Choice

Which of the following observations is true of an S corporation?

• A)It elects to be taxed in the same manner as a corporation.
• B)It does not have the burden of double taxation of corporate income.
• C)Its shareholders have personal liability for the corporation's obligations.
• D)Its primary income source should be passive investments.

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Definitions:

Dissolution

The process of formally ending or dissolving an entity, such as a corporation, partnership, or marriage, through legal means.

Corporation

A legal entity formed by issuing stock to investors, who are the owners of the corporation.

Certificate

A formal document attesting to a certain fact, such as the completion of an educational process or the ownership of a stock.

Secretary of State

An official in the federal and state governments who is responsible for keeping records, managing governmental documents, and often overseeing elections.