Oregon Construction Contractors (CCB) Practice Test

Which one of these is NOT a common form of corporation in the construction industry?

1. Limited Liability Corporation

2. 501 ©

3. "S" Corporation

4. "C" Corporation

The correct answer is: 501 ©

The correct answer, which indicates a form of corporation not commonly associated with the construction industry, is 501(c). This designation refers specifically to tax-exempt organizations under Section 501(c) of the Internal Revenue Code, typically non-profit entities that serve charitable, religious, educational, or similar purposes. These entities do not operate for profit and are not primarily structured for the construction business framework. In contrast, Limited Liability Corporations (LLCs), "S" Corporations, and "C" Corporations are all forms of business entity structures that are prevalent in various industries, including construction. LLCs provide liability protection while allowing for flexible taxation options. "S" Corporations are designed for small businesses with a limited number of shareholders, offering pass-through taxation to avoid double taxation. "C" Corporations represent traditional corporations that are taxed separately from their owners and can issue shares to raise capital, making them suitable for larger construction firms needing significant funding. Understanding these distinctions highlights the unique purpose and regulatory implications of each entity type, especially in the context of the construction industry’s operational needs.