Business law question PLEASE help?

[herald]

1. Jerry and Frank, U.S. citizens, are the owners of a business, which made a profit in 2010, and which then made a non-salary/non-bonus distribution of all of the profit upstream to the owners, Jerry and Frank, in 2010. Their accountant advises them that the business does not have to pay income tax on the profit. The accountant also advises that even though each of Jerry and Frank enjoy limited liability, each of Jerry and Frank has to pay individual income tax on the upstream payment. Assuming the accountant is correct, what type of legal entity is the business?
a. C corporation
b. S corporation
d. Sole proprietorship
e. General partnership
f. Limited partnership

[clem84]

Sounds like a "general partnership"........ (E)

http://www.irs.gov/businesses/small/article/0,,id=98214,00.html

http://en.wikipedia.org/wiki/Partnership_taxation


but the same thing is true of a Sole proprietorship