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Paralegal Exam Prep

Category - Miscellaneous

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Which is true of a limited liability corporation (LLC)?

It shields its owners' personal assets.
A nonprofit can be organized as a limited liability corporation.
It is the same as a sole proprietorship.
Owners do not have to report income from limited liability corporations.
None of the above.

Explanation

Answer: A. A limited liability corporation (LLC) shields its owners' personal assets. An LLC provides its owners' assets protection through the doctrine of limited liability. However, income is taxed on the owners' personal income tax returns.

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