INTRODUCTION TO ENTREPRENEURSHIP
DEFINITION OF ENTREPRENEURSHIP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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LLC
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C Corporation
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Sole proprietorship
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Non profit
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Detailed explanation-1: -Businesses that are registered as C corps (and LLCs that elect to be treated as corporations) are taxed twice on business profits. The corporation first pays taxes on its profits, but then stockholders must pay personal income taxes on the dividends paid from the company’s profits.
Detailed explanation-2: -Corporations and Limited Liability Companies (LLCs) treated as corporations are double-taxed as they are considered as separate entities.
Detailed explanation-3: -For example, when capital gains accrue from stock holdings, they represent a second layer of tax, as corporate earnings are already subject to corporate income taxes. Additionally, the estate tax creates a double tax on an individual’s income and the transfer of that income to heirs upon death.