The owners of a limited liability company generally prefer:
A)being taxed like a corporation.
B)having liability exposure similar to that of a sole proprietor.
C)being taxed personally on all business income.
D)having liability exposure similar to that of a general partner.
E)being taxed like a corporation with liability like a partnership.

Question

Quizplus · Accepted Answer

Owners of a limited liability company (LLC) generally prefer being taxed personally on all business income, which allows them to avoid the double taxation that corporations face (where income is taxed at both the corporate level and again as personal income when distributed as dividends). This is known as "pass-through" taxation, where the business itself is not taxed, but the income is passed through to the owners who report it on their personal tax returns.

The Owners of a Limited Liability Company Generally Prefer