A disadvantage of a limited liability company is that it ________
A) requires earnings to be taxed at the corporate rate
B) must dissolve when an owner leaves the company
C) requires the division of profits in a fixed proportion
D) has more restrictive ownership rules than S corporations
E) is required to hold annual meetings
B
Explanation: B) Unlike corporations, when an owner leaves an LLC, the LLC must dissolve. Some states also require that a dissolution date be listed in the articles of organization, so an LLC has a limited life span.
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