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? limited liability company sole proprietorship s - corporation c - corporation

Explanation:

A Limited Liability Company (LLC) offers limited - liability protection like large corporations and avoids double - taxation. A sole proprietorship has unlimited liability. A C - Corporation is subject to double - taxation. An S - Corporation has restrictions on the number and type of shareholders and other requirements, but it also avoids double - taxation and offers limited liability. Given the four - partner situation and the desire for limited liability and no double - taxation, an S - Corporation is a good fit as it allows for a small number of shareholders and meets the other criteria.

Answer:

C. S - Corporation