Asked by Kolby Finnie on May 21, 2024
Verified
Which statement is false?
A) Some companies seem to fall into the cracks between partnerships and corporations.
B) There are limited partnerships,which not only avoid paying corporate income taxes,but also minimize legal risk to their investors.
C) The Internal Revenue Service has disallowed the formation of limited liability companies,which have the legal insulation of a corporation and the preferred tax treatment of a limited partnership.
D) You can form a limited liability company to protect your personal assets if your business is sueD.
Limited Partnerships
A form of partnership consisting of one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who are liable only to the extent of their investments.
Corporate Income Taxes
Taxes imposed on the net income or profit of corporations, calculated after deducting expenses like cost of goods sold and wages.
- Identify the differences between valid and invalid claims about economic theories and business models.
Verified Answer
QP
Quân Ph?m MinhMay 25, 2024
Final Answer :
C
Explanation :
The statement that the IRS has disallowed the formation of limited liability companies is false. LLCs are a commonly used business structure that offer the legal insulation of a corporation and the preferred tax treatment of a partnership.
Learning Objectives
- Identify the differences between valid and invalid claims about economic theories and business models.