An LLC (limited liability company) offers its principals the same liability coverage as principals in corporations with pass-through taxation. This means that the profits and losses of the LLC are passed through to the individual tax returns of each member, rather than being taxed at the business level like a corporation. Additionally, an LLC provides limited liability protection to its members, meaning they are not personally responsible for business debts and liabilities.

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An LLC

Question 52

Multiple Choice

An LLC:

A) offers principals the same liability coverage as principals in corporations with taxation at the business entity level.
B) offers principals the same liability coverage as principals in corporations with pass through taxation.
C) offers principals the same liability coverage as general partners in a partnership with taxation at the business entity level.
D) offers principals the same liability coverage as limited partners in a partnership with pass through taxation

Correct Answer: