Owners of smaller companies often set up related entities to transact with in order to do which of the following?
A)hide the transaction from the shareholders.
B)steal assets from the small company.
C)derive tax benefits.
D)fraudulently create a unconsolidated entity.

Question

Quizplus · Accepted Answer

Owners of smaller companies often set up related entities to derive tax benefits, such as splitting income between entities to take advantage of lower tax rates or claiming deductions from one entity against the other. Options A, B, and D are all illegal and unethical practices that should be avoided.

Owners of Smaller Companies Often Set Up Related Entities to Transact