Question

Limited liability companies are primarily designed to:

A. allow a portion of their owners to enjoy limited liability while granting the other portion of their owners control over the entity.
B. provide the benefits of the corporate structure to foreign-based entities.
C. spin off a wholly owned subsidiary.
D. allow companies to reorganize themselves through the bankruptcy process. (e). provide limited liability while avoiding double taxation.

Answer 1

Answer: (E) Provide limited liability while avoiding double taxation.

Explanation:

 The LLC companies are basically designed to providing the limited liability while avoid the double taxation. One of the main advantage of the limited liability is passes through the taxes.

The limited liability company only focus on the main legal treatment and their purpose is to reduce the taxes liability from the investors.

There is no requirement of file that corporate the tax return and the owner share their own individual tax return report for void the double taxation.