Tracy is considering expanding his business and has several potential new investors in mind. He originally wanted to form an S-corporation to protect the liability of the investors, but he is now considering a limited-liability company instead because he knows there can be only ____ stockholders in an S-corporation.
A) 10
B) 25
C) 50
D) 100
E) 108

Question

Quizplus · Accepted Answer

S-corporations are limited to 100 shareholders, making them less flexible than limited liability companies (LLCs) when it comes to the number of investors or partners.

Tracy Is Considering Expanding His Business and Has Several Potential