The S Corporation Is Likely to Be Less Popular in the Future

Multiple Choice

The S corporation is likely to be less popular in the future because:

A) Congress repealed the limited liability protection of S corporations and limited them to companies with earnings of less than $3 million
per year.
B) Limited liability companies, which do not have the restrictive eligibility requirements of S corporations and offer greater flexibility in the
choice of tax treatment, are now legal in all 50 states.
C) Many states significantly increased the annual fee that S corporations must pay to maintain their tax status, thus eliminating the financial
advantages of this form of ownership.
D) S corporations have been made illegal in several states as a reaction to widespread abuse of the special benefits available to this type of
business.