Which of the Following Is True of a Limited Liability

question 141

Multiple Choice

Which of the following is true of a limited liability corporation?

• A) It is commonly identified by the "Inc." designation in a name.
• B) It consists of a general partner and one or more "limited" partners who do not participate in day-to-day business management.
• C) The business owner is personally liable for business debts and claims.
• D) For tax purposes, it functions as a sole proprietorship in the case of a single owner.
• E) It involves the owners going into debt by borrowing money from another person, bank, or financial institution.

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Definitions:

Equilibrium Wage Rate

The wage rate at which the quantity of labor demanded equals the quantity of labor supplied in the market.

Payroll Tax

A tax that an employer withholds and pays on behalf of its employees based on the wage or salary of the employee, typically used to fund social security and healthcare programs.

Labor Supply

The total hours that workers wish to work at a given wage rate, or the workforce available for employment.

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff, used to fund social security and other government programs.