A new business has been formed and anticipates raising equity investment from more than 100 individual investors, none of whom are venture capital funds. The business is seeking pass-through taxation, various classes of stock, and limited liability to all investors. The most suitable form of entity is a:a. C corporation

b. S corporation

c. Benefit corporation

d. Limited liability company

Question

Business

Troy Poole

27 January, 05:15

A new business has been formed and anticipates raising equity investment from more than 100 individual investors, none of whom are venture capital funds. The business is seeking pass-through taxation, various classes of stock, and limited liability to all investors. The most suitable form of entity is a:a. C corporation

b. S corporation

c. Benefit corporation

d. Limited liability company

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Answers (1)

Know the Answer?

Flakey · Answer 1

The correct answer is letter "D": Limited liability company.

Explanation:

Limited Liability Companies or LLCs are entities where the owners are not personally liable for the debt of the company. Owners are taxed on the company's profits when they receive them only and they are not subject to file an individual tax return for it.

In case the company decides to become public, several standards must be met according to the Securities and Exchange Commission (SEC) for the firm to issue shares of stock or another type of investment vehicle.