Which of the following is a difference between a C corporation and an S corporation?
A) The members of a C corporation have unlimited liability, whereas the members of an S corporation enjoy limited liability.
B) The members of a C corporation have limited liability, whereas the members of an S corporation have unlimited liability.
C) A C corporation is double taxed, whereas an S corporation is taxed as a partnership.
D) A C corporation is taxed as a partnership, whereas an S corporation is double taxed.

Question

Quizplus · Accepted Answer

A C corporation is subject to double taxation, meaning the corporation's income is taxed at the corporate level and again at the shareholder level when dividends are distributed. An S corporation, however, is taxed as a pass-through entity, similar to a partnership, where income is taxed only at the shareholder level.

Which of the Following Is a Difference Between a C