To raise capital,Anna Moreno and Talia Black plan to sell stock to between 108 and 200 investors.They also want to avoid double taxation.Which type of business ownership would you recommend?

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Quizplus · Accepted Answer

An LLC provides limited liability protection to its owners and allows for pass-through taxation, meaning the business's profits and losses are reported on the owner's personal tax returns, avoiding double taxation. An LLC can also have multiple owners and allow for the sale of stocks to investors, meeting the requirements of Anna Moreno and Talia Black. While a regular corporation or cooperative may provide limited liability protection, they are subject to double taxation. An S-corporation is also an option, but it has restrictions on the number and type of shareholders, which may not meet the needs of a company looking to sell stock to between 108 and 200 investors. Limited partnership is not the best choice as the partners are liable for any debts of the partnership.

To Raise Capital,Anna Moreno and Talia Black Plan to Sell