Partnerships and most LLCs are known as pass-through entities. What does this mean for their partners (in the case of partnerships) and members (in the case of LLCs)? a. The businesses themselves are not subject to income tax; the individual partners/members pay income tax on their share of the businesses’ profitsb. Partners and members are subject to double taxation

Limited liability companies (LLCs) are going through substances naturally. Except if the proprietors…

Answered: Partnerships and most LLCs are known as…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Partnerships and most LLCs are known as pass-through entities. What does this mean for their partners (in the case of partnerships) and members (in the case of LLCs)?

a. The businesses themselves are not subject to income tax; the individual partners/members pay income tax on their share of the businesses’ profits

b. Partners and members are subject to double taxation

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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