The S corporation is likely to be less popular in the future because:
A) Congress repealed the limited liability protection of S corporations and limited them to companies with earnings of less than $3 million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 and offer greater flexibility in the
choice of tax treatment, are now legal in all 50 states.
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.

Question

Quizplus · Accepted Answer

Limited liability companies (LLCs) offer the same limited liability protection as S corporations, but with fewer eligibility requirements and greater flexibility in tax treatment options. As a result, more businesses may choose to form LLCs instead of S corporations in the future. None of the other options listed are accurate or true.

The S Corporation Is Likely to Be Less Popular in the Future