Question

Uchechi is starting a new company and needs to choose a business form. She wants a business form that will allow her to avoid double taxation during the first few years of her business (because she plans to use all of her profits to grow the business and won't be taking any distributions for herself, so her profits will only be taxed once at the lower corporate tax rate), and then single taxation after that (because she will then start taking distributions for herself, and she doesn't want those distributions to be double taxed). Which business form will allow her to do this? Group of answer choices Limited partnership (LP) Limited liability limited partnership (LLLP) Limited liability company (LLC) Sole proprietorship 

          Uchechi is starting a new company and needs to choose a business form. She wants a business form that will allow her to avoid double taxation during the first few years of her business (because she plans to use all of her profits to grow the business and won't be taking any distributions for herself, so her profits will only be taxed once at the lower corporate tax rate), and then single taxation after that (because she will then start taking distributions for herself, and she doesn't want those distributions to be double taxed). Which business form will allow her to do this? 
Group of answer choices
Limited partnership (LP)
Limited liability limited partnership (LLLP)
Limited liability company (LLC)
Sole proprietorship
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Added by Charles M.

Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
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Uchechi is starting a new company and needs to choose a business form. She wants a business form that will allow her to avoid double taxation during the first few years of her business (because she plans to use all of her profits to grow the business and won't be taking any distributions for herself, so her profits will only be taxed once at the lower corporate tax rate), and then single taxation after that (because she will then start taking distributions for herself, and she doesn't want those distributions to be double taxed). Which business form will allow her to do this? Group of answer choices Limited partnership (LP) Limited liability limited partnership (LLLP) Limited liability company (LLC) Sole proprietorship
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Transcript

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00:01 Jane che operates a management consulting business and the business has been successful and now produces a taxable income of $100 ,000 per year after an ordinary and necessary expenses depreciation has been deducted.
00:17 At present, the business is operated as a proprietorship, that is, jane pays per personal federal income tax on the entire $100 ,000.
00:26 For tax purposes, it is assumed that she has a job that pays her $100 ,000 per year.
00:32 As an alternative, she is considering incorporating the business.
00:36 If she does, she will pay herself a salary of $40 ,000 a year from the corporation.
00:43 Now the corporation will then pay the taxes on the remaining $60 ,000 and retain the balance of the money as corporate assets.
00:52 So they will pay taxes on the remaining $60 ,000.
01:00 So jane's two alternatives operate the business as a proprietorship or as a corporation.
01:06 Jane is single and has $3 ,500 deduction.
01:13 Which alternative will result in a smaller total payment of taxes to the government? so we are trying to find out if she should run a proprietorship or a corporation...
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