Todd and Jorge have considered starting their own business but are concerned about the possibility of losing their personal assets if the business fails.One way for both Todd and Jorge to avoid this risk would be to organize their firm as a:
A)general partnership.
B)limited partnership.
C)corporation.
D)sole proprietorship.

Question

Quizplus · Accepted Answer

Organizing their firm as a corporation would provide Todd and Jorge with limited liability, meaning their personal assets would not be at risk if the business were to fail. In a corporation, the business is considered a separate legal entity from its owners, and as such, the owners are not personally liable for the corporation's debts or legal obligations. This makes it the best choice for Todd and Jorge if they want to protect their personal assets. A general partnership and sole proprietorship both offer no protection for personal assets, while a limited partnership would only protect the limited partners' assets, not the general partners' assets.

Todd and Jorge Have Considered Starting Their Own Business but Are