Reference - Nails

Reference - Nails. Mona and her friends Jack and Bobby, all U.S. citizens, want to open a nail salon in Tennessee. They would all like to avoid personal liability for debts of the business and for wrongful acts of each other. They would also like to avoid taxation as much as possible. Mona is in favor of a corporation and asks if there is any problem with that form of business. Jack and Bobby say that they want to receive profit distributions and that they are concerned about excessive taxation with a corporation. Jack and Bobby urged the formation of a partnership even in the face of personal liability. Mona did some research and suggested an S corporation to Jack and Bobby. Are Jack and Bobby correct that tax liability will likely be greater with a corporate form of business (not an S corporate form) and why?

A) No, they are incorrect because with only three shareholders, tax liability with a corporation would likely be less than tax liability with a partnership.
B) No, they are incorrect because with only three shareholders, tax liability would be exactly the same with a corporation as with a partnership so long as the net income of the corporation was not over $250,000.
C) No, they are incorrect because with only three shareholders, tax liability would be exactly the same with a corporation as with a partnership so long as the gross income of the corporation was not over $150,000.
D) No, they are incorrect because with only three shareholders, tax liability would be exactly the same with a corporation as with a partnership so long as the gross income of the corporation was not over $100,000.
E) Yes, they are correct because the corporate form of business would result in double taxation with the corporation being taxed on income and shareholders being taxed again on dividends they receive.