Question

The S corporation is likely to be less popular in the future because:

Select one:
a. Congress repealed the limited liability protection of S corporations and limited them to companies with earnings of less than $3 million per year
b. Limited liability companies, which do not have the restrictive eligibility requirements of S corporations
c. Many states significantly increased the annual fee that S corporations must pay to maintain their tax status, thus eliminating the financial advantages of this form of ownership
d. S corporations have been made illegal in several states as a reaction to widespread abuse of the special benefits available to this type of business

Answer 1

The S corporation is likely to be less popular in the future due to increased annual fees, the rise of limited liability companies, and abuse of special benefits.

Step-by-step explanation:

The S corporation is likely to be less popular in the future because many states significantly increased the annual fee that S corporations must pay to maintain their tax status, thus eliminating the financial advantages of this form of ownership. Additionally, limited liability companies (LLCs) have become a more popular alternative to S corporations as they do not have the restrictive eligibility requirements. Lastly, S corporations have not been made illegal in several states due to abuse of the special benefits available to this type of business.