Jane Doe,who has substantial personal wealth and income,is considering the possibility of opening a new business in the chemical waste management field.She will be the sole owner.The business will have a relatively high degree of risk,and it is expected that the firm will incur losses for the first few years.However,the prospects for growth and positive future income look good,and Jane expects to realize substantial cash flows from dividends the firm will eventually pay out.Which of the legal forms of business organization would probably best suit her needs?

Question

Quizplus · Accepted Answer

An S corporation provides the benefits of limited liability, which is crucial given the high degree of risk in the chemical waste management field, and it allows for the pass-through of income and losses to the owner's personal tax return, which can be advantageous during the initial years of losses. This structure also supports the expectation of substantial cash flows from dividends in the future.

Jane Doe,who Has Substantial Personal Wealth and Income,is Considering the Possibility