One disadvantage of a limited liability company is that it
A) requires all earnings of the business be taxed at the corporate rate.
B) has a limited life span.
C) requires the owners to divide up profits and losses in a fixed proportion.
D) has a more restrictive ownership requirement than S corporations.

Question

Quizplus · Accepted Answer

Limited liability companies (LLC) have a limited lifespan, meaning that they may dissolve upon the retirement, resignation, bankruptcy, or death of one of the owners, unless there is a provision in the operating agreement that states otherwise. This can create instability for the business and its owners. A, C, and D are not disadvantages of LLCs.

One Disadvantage of a Limited Liability Company Is That It