Jeremy and three friends began making and selling snowboards from Jere

QUESTION

Jeremy and three friends began making and selling snowboards from Jeremy’s garage five years ago. They are so successful now that they have a factory with many employees, and they have decided to restructure the company.

They are going to sell stock, but they will continue to be taxed at a lesser rate than the corporate income tax. What kind of company will they be?
A) a sole proprietorship
B) a master limited partnership
C) a limited liability partnership
D) a limited liability company
E) a C corporation

ANSWER

Answer: B
Explanation: B) In a master limited partnership, the partnership acts like a corporation, selling stock on a stock exchange, but it is taxed like a partnership, paying a lesser rate than the corporate income tax.