Limited liability companies are primarily designed to:

a. spin off a wholly owned subsidiary

b. provide the benefits of the corporate structure to foreign-based entities

c. allow a portion of their owners to enjoy limited liability while granting the other portion of their owners control over the entity

d. allow companies to reorganize themselves through the bankruptcy process

e. provide limited liability while avoiding double taxation

Question

Business

Case Clarke

Today, 19:04

Limited liability companies are primarily designed to:

a. spin off a wholly owned subsidiary

b. provide the benefits of the corporate structure to foreign-based entities

c. allow a portion of their owners to enjoy limited liability while granting the other portion of their owners control over the entity

d. allow companies to reorganize themselves through the bankruptcy process

e. provide limited liability while avoiding double taxation

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Rodolfo Greer · Answer 1

The answer to the given question above is option D: provide limited liability while avoiding double taxation. This is the main purpose of the limited liability companies. So basically, in a limited liability company or known as the LLC, the members of the company are considered safe from any chances of debts or liabilities of the company. Given this benefit, the LLC does not pay taxes.