A primary difference between an S-corporation and a C-corporation is that: a. th

Question

A primary difference between an S-corporation and a C-corporation is that:

a. the C-corporation offers the advantage of limited liability to its stockholders, and an S-corporation does not.
b. the C-corporation itself pays taxes based on a corporate tax structure, and the S-corporation passes all of its profits (or losses) through to its individual shareholders where they are taxed at the individual rate.
c. the founders of an S-corporation are protected from the potential loss of control that occurs when the founders of C-corporations sell shares of stock to raise the capital needed for growth.
d. S-corporations are much easier and less expensive to form than C-corporations, which require their founders to file a certificate of incorporation with the state and to pay incorporation fees.

Explanation / Answer

the answer is B

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