Question

George and Mark are also considering other business forms for P&P Enterprises. They want the limited liability of a corporation and the tax status of a flow-through entity, but they don't want to deal with restrictions on shareholders and classes of stock. What business form should they choose:

a.a general partnership.
b.a sole proprietorship.
c.a limited liability company.
d.a close corporation.

Answer 1

George and Mark should choose a limited liability company (LLC) for their business form. An LLC combines the limited liability protection of a corporation with the tax benefits of a flow-through entity.

Step-by-step explanation:

George and Mark should choose a limited liability company for their business form. A limited liability company (LLC) combines the limited liability protection of a corporation with the tax benefits of a flow-through entity. It provides the limited liability that George and Mark desire, which means their personal assets would be protected in case of business debts or legal issues.

Furthermore, an LLC offers flexibility in terms of management structure and does not have the same restrictions on shareholders and classes of stock as a corporation. George and Mark can decide how to allocate profits and losses between themselves without being subject to rigid regulations.