Question asks:
Which of the following business structure types is most appropriate?
The correct answer is: D. S Corporation
But an S corp is a tax structure, not a business structure. Am I confused?
Also, another answer/option with explanation: B. Limited Liability Corporation (LLC)
Incorrect. LLCs are ideal for sole practitioners or new firms needing to shield personal assets from professional liability, but they require higher self-employment taxation.
Shouldn’t this instead note that LLCs are illegal for architecture firms in CA? Am I wrong on this?
The full question does not explicitly say architecture firm but certainly hints at it:
A 42-person grassroots Minority Business Enterprise (MBE) with high profits prioritizes face-to-face client interactions and hand drafting for high-end residential clients. Due to their long standing relationship with the community, the city has invited the firm to respond to a request for proposals to convert a historic school building into high end apartments. If awarded, the scale of the project will require hiring ten more individuals at various staffing levels to maintain current work loads, including a full-time historic preservation specialist. The firm would like to use this as an opportunity to expand services.
Which of the following business structure types is most appropriate?
Is the question a trick to see they offer design services but not are not an architecture firm?