Question

which of the following would be a reason a business is structured as a c corporation?

a. the corporation is not required to file legal paperwork to start the business.

b. the corporation can use personal assets of its shareholders to satisfy any business liabilities.

c. the corporation can continue if any one or more of the owners are no longer affiliated with the business.

d. the corporation does not need to generate a separate tax return for business expenses.

Explanation:

• Option A: C corporations require filing legal paperwork (like articles of incorporation) to start, so A is incorrect.
• Option B: C corporations have limited liability, meaning shareholders' personal assets are not used for business liabilities, so B is incorrect.
• Option C: C corporations have perpetual existence, meaning they can continue even if owners (shareholders) leave, which is a key reason for this structure.
• Option D: C corporations must file a separate corporate tax return, so D is incorrect.

Answer:

C. The corporation can continue if any one or more of the owners are no longer affiliated with the business.