20
QuizMultiple Choice

Study Guide and Quiz

Question 20 • GA-Introduction to Business and Technology

Which of the following types of business ownership has the advantages of pass-through taxation and liability protection?

Answer
A
A sole proprietorship
B
An LLC
C
A C corporation
D
A partnership

Explanation

An LLC (limited liability company) generally combines pass-through taxation with liability protection. Business profits and losses can pass through to the owners’ personal tax returns, while the owners’ personal assets are generally protected from business debts. A sole proprietorship and a partnership typically lack that liability protection, and a C corporation generally does not have pass-through taxation.

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