The limited liability company combines the tax advantage of the partnership with the limited liability feature of the corporate form of business organization.

Question

Quizplus · Accepted Answer

A limited liability company (LLC) is a hybrid business entity that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability protection of a corporation. This means that the owners or members of the LLC are not personally responsible for the company's debts or liabilities, and the company's profits and losses are reported on the owners' personal tax returns. Therefore, the statement is true.

The Limited Liability Company Combines the Tax Advantage of the Partnership