Question

A group of friends are creating a new mobile paper shredding company that will go to businesses or organizations to shred their sensitive papers in bulk. You are advising them as to the type of business entity to choose. They have a number of partners, but their primary goals are to avoid personal liability and double taxation. They want to pay each of the partners based on their contribution to the success of the company, which is NOT equal to their percentage ownership. You advise them to accomplish this by forming a(n):a.General partnershipb. LLCc. S Corpd. C Corp

Answer 1

Answer:

The correct answer is letter "B": LLC.

Explanation:

A Limited Liability Company (LLC) is a type of business organization where the owners do not share unlimited liability. This scenario implies that the owners are responsible for the liabilities of the entity according to their contribution. LLCs as considered individual firms with an individual tax identification number, bank account, and name.