Which entity is described as a hybrid between a partnership and a corporation, offering limited liability and avoiding double taxation?

Which entity is described as a hybrid between a partnership and a corporation, offering limited liability and avoiding double taxation?

• A. Limited Partnership
• B. Manufacture
• C. Limited Liability Company
• D. Market

Answer: (C)

A limited liability company provides that blend of protection and tax simplicity. Owners (members) enjoy limited personal liability, like a corporation, but the entity itself is not taxed at the corporate level. Instead, profits and losses pass through to the members’ personal tax returns, avoiding double taxation. This structure also offers flexibility in how it’s managed and taxed, commonly treated as a partnership for tax purposes with multiple members, unless an alternative election is made. The other options don’t offer this combination of liability protection for all owners and pass-through taxation, and some refer to industries rather than business-form types.

A limited liability company provides that blend of protection and tax simplicity. Owners (members) enjoy limited personal liability, like a corporation, but the entity itself is not taxed at the corporate level. Instead, profits and losses pass through to the members’ personal tax returns, avoiding double taxation. This structure also offers flexibility in how it’s managed and taxed, commonly treated as a partnership for tax purposes with multiple members, unless an alternative election is made. The other options don’t offer this combination of liability protection for all owners and pass-through taxation, and some refer to industries rather than business-form types.