Identify which of the following statements is true.
A)When a partnership is divided into two or more new partnerships, all of the resulting partnerships must be considered new partnerships.
B)A partnership is "publicly traded" only if its interests are traded on an established securities exchange.
C)A limited liability company is a form of business entity that combines the legal benefits of the corporate form with the tax benefits of the partnership form.
D)All of the above are false.

Question

Quizplus · Accepted Answer

Option C is true as a limited liability company (LLC) is a flexible business structure that combines advantages of both partnership and corporation structures. They offer limited liability protection to owners along with pass-through taxation benefits like partnerships. Option A is false as when a partnership is divided into two or more new partnerships, the resulting partnerships may or may not be considered new partnerships. Option B is false as a partnership interest can be traded publicly without being listed on an established securities exchange.

Identify Which of the Following Statements Is True