Answered: When starting a business, choosing…

When starting a business, choosing which kind of business entity to form is an important decision with many implications. Why might venture capitalist prefer to invest in a C corporation?

Foundations of Business (MindTap Course List)

6th Edition

ISBN:9781337386920

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter15: Using Management And Accounting Information

Section15.5D: Liabilities And Owners’ Equity

Problem 3CC

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Question

9. When starting a business, choosing which kind of business entity to form is an important decision with many implications. Why might venture capitalist prefer to invest in a C corporation?

Group of answer choices

A. Because the C Corporation is easier to merge, sell, or take public

B. Because the laws of an LLC are still too uncertain

C. The capital gains tax is more favorable under a C Corps

D. All of the Above

E. A and B only

Definition Definition Increase in the value of a capital asset and the amount that is realized when the asset is sold off. A capital gain may be short-term or long-term depending on the tenure for which the asset is held.

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