Question

Identify which of the following statements is true:

a. regular corporation and S corporation are synonymous terms
b. a partner is generally considered to be an employee of the partnership
c. regular corporation and c corporation are synonymous terms
d. all of the above are false

Answer 1

The correct statement is that a regular corporation and a C corporation are synonymous terms; they both refer to a separate legal entity that provides limited liability to its owners.

Step-by-step explanation:

Among the statements provided, the true one is c. Regular corporation and c corporation are synonymous terms. A regular corporation, also known as a C corporation, is a legal entity that is separate from its owners and provides limited liability. In contrast, an S corporation is designed for small businesses that meet certain Internal Revenue Service (IRS) qualifications and allows profits (and some losses) to be passed through directly to the owners' income without being subject to corporate tax rates.

As for the statement b, typically a partner in a partnership is not considered to be an employee, but rather a co-owner of the business, sharing in the profits and losses of the enterprise.