Wally and Sally want to go into business together and plan on offering a tutoring service to high school and college students. Wally proposes that they share control of the business and split profits equally and not bother with a written agreement. Sally, however, is concerned about being able to pay their debts since they will have to rent tutoring space and purchase computers and supplies. She is also concerned about parents and students who may sue if the students' test scores do not improve. She tells Wally that she just bought a new boat and car, and that she does not want her assets to be in jeopardy. She tells Wally that they should form a corporation to shield their personal assets. Wally, however, says their personal assets are not in danger with his proposal because they are a business and that, furthermore, forming a corporation would likely result in double taxation.

A. Is Wally correct with his proposal that because they share control of the business and split profits equally, they will not have any personal liability for debts?

B. Is Wally correct that forming a corporation would likely result in double taxation?

C. What type(s) of arrangement, if any, would avoid double taxation and personal liability for Wally and Sally's endeavor?