Which of the following BEST explains the difference between a corporation and an LLC? a) LLCs are limited to 100 shareholders. b) LLC owners are called members. c) LLC passive income limit is 25%. d) LLCs require an annual report.
Which of the following BEST explains the difference between a corporation and an LLC? a) LLCs are limited to 100 shareholders. b) LLC owners are called members. c) LLC passive income limit is 25%. d) LLCs require an annual report.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Which of the following BEST explains the difference between a corporation and an LLC?
| a) | LLCs are limited to 100 shareholders. | |
| b) | LLC owners are called members. | |
| c) | LLC passive income limit is 25%. | |
| d) | LLCs require an annual report. |
Expert Solution
Step 1
An LLC (limited liability company) is a type of business that is a hybrid of a sole proprietorship and a corporation. The LLC has a choice to be taxed as a partnership or a corporation.
A corporation is a type of business that has its own identity and signature. Companies can be sued by others and get their own funds and take on their own debts. . A corporation is a form of business that is very costly to form compared to other forms of business.
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