Which of the following statements, if any, correctly describe the status or nature of limited liability companies?

Question

Quizplus · Accepted Answer

Limited liability companies (LLCs) can elect partnership tax status even if incorporated under state law, but this statement is not a comprehensive description of LLCs. LLCs are a type of business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability protection of a corporation. One of the main reasons why the check-the-box Regulations were issued by the IRS was to provide guidance on how LLCs should be taxed. LLCs can elect to be taxed as a corporation, but this option might not be advantageous for every LLC. Statutes creating LLCs have been adopted by a majority of the states, not a minority.

Which of the Following Statements, If Any, Correctly Describe the Status