Question

you need to create a legal structure for your small business. you would like some of the benefits enjoyed by large corporations, but do not want to be taxed twice. you have four partners who will be shareholders. none of you plan to sell your ownership shares to the public, but do want to be protected from business liabilities. which legal structure should you set up for your business? o o o o sole proprietorship c - corporation limited liability company s - corporation

Explanation:

1. Analyze Sole Proprietorship: It has one owner, no shareholders, and doesn't protect from liabilities. Eliminate as there are four partners.
2. Analyze C - Corporation: It is taxed twice (corporate and personal), which is not desired. Eliminate.
3. Analyze Limited Liability Company (LLC): While it offers liability protection, the question's focus on shareholders and avoiding double - taxation with multiple shareholders points more towards S - Corp. LLCs can have members but the structure here with shareholders (partners as shareholders) and the desire to avoid double - taxation makes S - Corp a better fit.
4. Analyze S - Corporation: It allows for multiple shareholders (up to 100), provides liability protection, and is not taxed twice (pass - through taxation). It also doesn't sell shares to the public, which matches the scenario.

Answer:

D. S - Corporation