Question

Two of the advantages that Pass-Through Business type companies offer to owners are:

Select one:

to. lower tax payment and unlimited risk

b. limited risk and lower tax payments

c. higher tax payment and unlimited risk

d. None of the above

Answer 1

b.limited risk and lower tax payments.

The Pass through business type company will not be taxed at corporate level, its profits will be passed to owners.

It will then be taxed in the hands of owners at their personal tax rate.

A company form of organisation will have a limited liability, so it will have limited risk.

It cannot be said that Pass through type of companies will result in higher taxes or unlimited risk.