Which of the following statements concerning the differences in operating a business as a partnership or as an S corporation is true?
A) The S corporation form offers greater flexibility in allocating the income or loss among the owners.
B) The owners of an S corporation have unlimited personal liability for the debts of the business.
C) The owners of a general partnership have unlimited personal liability for the debts of the business.
D) All of these choices are true statements.

Question

Quizplus · Accepted Answer

The statement that the owners of a general partnership have unlimited personal liability for the debts of the business is true. The statement in option A is incorrect as partnerships also offer flexibility in allocating income or loss among partners. The statement in option B is incorrect as S corporations limit the personal liability of their shareholders. Therefore, option D is also incorrect.

Which of the Following Statements Concerning the Differences in Operating