Question

The business form that offers the limited liability of a corporation and the tax status of a flow-through entity is

a. a close corporation.
b. a sole proprietorship.
c. a limited liability company.
d. a general partnership.

Answer 1

A limited liability company (LLC) offers the limited liability of a corporation and the tax status of a flow-through entity.

Step-by-step explanation:

The business form that offers the limited liability of a corporation and the tax status of a flow-through entity is a limited liability company (LLC).

A limited liability company combines the benefits of a corporation with those of a partnership or sole proprietorship. Like a corporation, an LLC provides limited liability protection to its owners, meaning their personal assets are not at risk if the company faces legal action or debt. However, an LLC also offers the tax advantages of a flow-through entity, meaning the company's income is passed through to the owners, who are then responsible for reporting it on their personal tax returns.