Traci and Sally have considered starting their own business but are concerned about the possibility of losing their personal assets if the business fails.One way for Traci and Sally to avoid this risk would be to organize their company as a ________.
A) general partnership
B) limited partnership
C) corporation
D) sole proprietorship
E) merger

Question

Quizplus · Accepted Answer

Organizing their company as a corporation would provide Traci and Sally with limited liability, meaning their personal assets would not be at risk if the business fails. In a corporation, the entity is a separate legal entity from its owners and shareholders, shielding them from personal liability. General partnerships and sole proprietorships do not provide this protection, and limited partnerships may still expose the general partners to liability. A merger is not applicable in this scenario.

Traci and Sally Have Considered Starting Their Own Business but Are