Mackenzie's dream is to open a chain of salons. She hopes to attract investors to help finance growth. Having once considered forming a C corporation, Mackenzie wants to have more flexibility about how the new business will be taxed. She also wants to offer investors/owners limited liability. Mackenzie can satisfy her objectives by setting up a(n)
A) limited liability company.
B) S corporation.
C) alien corporation.
D) general partnership.

Question

Quizplus · Accepted Answer

Limited liability companies offer limited liability protection while allowing the company the choice of being taxed as a corporation or as a partnership. Although S corporations also offer limited liability, they do not offer the tax flexibility. Moreover, an S corporation has more stringent ownership rules.

Mackenzie's Dream Is to Open a Chain of Salons