Question

select all the correct answers. which sentences describe characteristics of a limited liability corporation (llc)? the owners in the arrangement are called members. the owners are largely free from personal liability. the company is treated as a separate tax entity by law. owners are exempt from liabilities arising from wrongful acts. llcs pay their taxes through their members personal tax returns.

Explanation:

1. For "The owners in the arrangement are called members": LLC owners are indeed called members, so this is correct.
2. For "The owners are largely free from personal liability": A key feature of LLC is limited personal liability for owners, so this is correct.
3. For "The company is treated as a separate tax entity by law": LLCs are not separate tax entities (they are pass - through entities), so this is incorrect.
4. For "Owners are exempt from liabilities arising from wrongful acts": Owners can be held liable for their own wrongful acts, so this is incorrect.
5. For "LLCs pay their taxes through their members’ personal tax returns": LLCs are pass - through entities, meaning profits and losses pass through to members who report them on personal tax returns, so this is correct.

Answer:

A. The owners in the arrangement are called members
B. The owners are largely free from personal liability
E. LLCs pay their taxes through their members’ personal tax returns