True or False: Owners of limited liability companies have more flexibility compared to S corporations.

Owners of limited liability companies (LLCs) indeed have more flexibility compared to S corporations, which makes the assertion true. This flexibility is evident in several areas, including management structures, profit distribution, and the potential for variation in ownership.

In LLCs, owners, known as members, can choose how they want to manage the company. They can opt for a member-managed structure, where all members participate in the management, or a manager-managed structure, where they designate specific members or outsiders to handle daily operations. This provides significant leeway compared to S corporations, which have a more rigid management structure dictated by corporate governance rules.

Regarding profit distribution, LLCs can distribute profits in any manner they choose, regardless of ownership percentage. This is unlike S corporations, where profit distribution must align with the proportion of ownership, limiting flexibility in how members can allocate financial gains among themselves.

Additionally, LLCs have fewer restrictions on ownership. S corporations are limited to 100 shareholders and can only issue one class of stock, imposing stricter eligibility requirements for owners. Conversely, LLCs can have an unlimited number of members and various classes of ownership interests, accommodating a broader range of potential investors.

These aspects contribute to the overall flexibility of LLCs, making the statement true