E.38 Characteristics and income taxation of business entities Flashcards
Learners will be able to identify and describe the characteristics and income taxation of various business entities, including sole proprietorships, partnerships, corporations, and S corporations, highlighting their unique tax implications and legal structures.
Which of the following business entities is not a pass-through entity for tax purposes?
A. Sole proprietorship
B. Partnership
C. C Corporation
D. S Corporation
C. C Corporation
E.38 Characteristics and income taxation of business entities
Which business entity is most likely to be subject to double taxation?
A. Sole proprietorship
B. Partnership
C. C Corporation
D. S Corporation
C. C Corporation
E.38 Characteristics and income taxation of business entities
Which business entity provides the most flexibility in terms of management and ownership structure?
A. Sole proprietorship
B. Partnership
C. Limited Liability Company (LLC)
D. S Corporation
C. Limited Liability Company (LLC)
E.38 Characteristics and income taxation of business entities
Which business entity is required to have a board of directors?
A. Sole proprietorship
B. Partnership
C. C Corporation
D. S Corporation
C. C Corporation
E.38 Characteristics and income taxation of business entities
Which business entity is required to file a separate tax return?
A. Sole proprietorship
B. Partnership
C. C Corporation
D. S Corporation
C. C Corporation
E.38 Characteristics and income taxation of business entities
Which business entity has the fewest formalities to maintain?
A. Sole proprietorship
B. Partnership
C. C Corporation
D. S Corporation
A. Sole proprietorship
E.38 Characteristics and income taxation of business entities
Which business entity is not allowed to have more than 100 shareholders?
A. Sole proprietorship
B. Partnership
C. C Corporation
D. S Corporation
D. S Corporation
E.38 Characteristics and income taxation of business entities
Which business entity is taxed as a partnership but provides limited liability protection to its owners?
A. Sole proprietorship
B. Partnership
C. C Corporation
D. Limited Liability Company (LLC)
D. Limited Liability Company (LLC)
E.38 Characteristics and income taxation of business entities
Emily is the sole owner of a small retail store. Which entity would be the most tax-efficient for her business?
A. Sole proprietorship
B. Partnership
C. C Corporation
D. S Corporation
A. Sole proprietorship
E.38 Characteristics and income taxation of business entities
Jane and Mark are partners in a law firm. They want to add a new partner but are concerned about losing control of the business. Which entity would be the best option for them?
A. Partnership
B. C Corporation
C. S Corporation
D. LLC
D. LLC
E.38 Characteristics and income taxation of business entities
John is the owner of a small business and wants to raise capital by issuing shares to investors. Which entity would be the most suitable for him?
A. Sole proprietorship
B. Partnership
C. C Corporation
D. S Corporation
C. C Corporation
E.38 Characteristics and income taxation of business entities
Sarah and Mike are considering starting a business together. They want to limit their personal liability and avoid double taxation. Which entity would be the best option for them?
A. Partnership
B. C Corporation
C. S Corporation
D. LLC
D. LLC
E.38 Characteristics and income taxation of business entities
