Question

John has started a company that will raise venture capital, and anticipates that ownership interests in the business will be widely held and will be provided to employees. The most suitable form of entity is a___________.

Answer 1

The options are:

a. C corporation

b. S corporation

c. Limited liability company

d. Benefit corporation

Answer:

a. C corporation

Explanation:

A C corporation is also called regular corporation, and is mostly applied to newly formed business. It is legally seperate from its owners who are the shareholders. Also in the case of debt or a court case the share holder's personal income is not affected because of the corporate shield provided by the business being an individual entity.

A C corporation is one that is taxed seperately from its owner. So the company pays taxes and owner's pay taxes on income earned.