Question
One of the characteristics of the form of business ownership known as an LLC is that this kind of business can last indefinitely it is required to have at least three owners (members) the IRS collects taxes based on the LLC's gross income the owners' personal property cannot be taken to pay the business's debts
Answer
4.5
(328 Votes)
Elodie
Veteran · Tutor for 12 years
Answer
d
Explanation
## Step 1: Understand the characteristics of an LLC (Limited Liability Company). An LLC is a business structure that offers limited liability protection to its owners (members). This means that the personal assets of the owners are protected from the business's debts and liabilities.## Step 2: Evaluate each option based on the characteristics of an LLC:- Option a: "This kind of business can last indefinitely." This is not necessarily true as an LLC can be dissolved for various reasons, such as insolvency or the decision of the members.- Option b: "It is required to have at least three owners (members)." This is incorrect. An LLC can be formed by one or more members; there is no requirement for a minimum of three owners.- Option c: "The IRS collects taxes based on the LLC's gross income." This is incorrect. The IRS taxes an LLC based on its number of members, treating it as a sole proprietorship or partnership, not based on gross income.- Option d: "The owners' personal property cannot be taken to pay the business's debts." This is correct. One of the key features of an LLC is limited liability, meaning the owners' personal assets are protected from business debts.## Step 3: Conclude that the correct option is the one that accurately describes the limited liability feature of an LLC.