Lewis and Elliot started a real estate investment business and incorporated to be treated like a partnership. What form of business did they establish?

Lewis and Elliot established a Subchapter S Corporation, commonly referred to as an S Corporation, which allows them to have the benefits of corporate status while being taxed similarly to a partnership. This structure provides limited liability protection, meaning that their personal assets are generally protected from business liabilities, while also allowing for pass-through taxation. This means that the income of the corporation is not taxed at the corporate level, but instead is passed through to the shareholders, who report it on their personal tax returns.

This hybrid nature of an S Corporation allows Lewis and Elliot to maintain the operational flexibility of a partnership while also enjoying some of the advantages of a traditional corporation. By choosing this status, they can potentially reduce their overall tax burden and avoid the double taxation that typically affects C Corporations, which are taxed at both the corporate level and again at the individual level when profits are distributed as dividends.

The other choices do not adequately describe the structure Lewis and Elliot have chosen. A Limited Liability Company offers many of the same benefits but does not function as a corporation in terms of taxation and structure. A General Partnership, while providing pass-through taxation, does not offer the same level of personal liability protection. Lastly, a Corporation, particularly a C Corporation, would subject them to double