Carl, Anne, and Al were friends in college. After graduation they decided to open a company that sells computer printer ribbons and cartridges. They each have $20,000 to put into the business, and want equal shares of the business. They are not worried about liability because they are not actually going to work on printers or going to work in their customer's place of business. They also want to avoid double taxation. The most likely form of business organization for them would be a

Question

Quizplus · Accepted Answer

Given their desire for equal shares, avoidance of double taxation, and no concern about liability related to direct service, a Subchapter S corporation is the most fitting. It allows for the business income to be passed through to their individual tax returns, avoiding the double taxation that a regular corporation (C corporation) would incur.

Carl, Anne, and Al Were Friends in College