Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50/50 basis.Which type of entity did they create if they have no personal liability for the firm's debts?
A)limited partnership
B)corporation
C)sole proprietorship
D)general partnership
E)public company

Question

Quizplus · Accepted Answer

Todd and Cathy created a corporation, which is a separate legal entity from its owners (shareholders). As such, the shareholders have limited liability, meaning they are not personally responsible for the debts and liabilities of the corporation. Additionally, the fact that Todd and Cathy share ownership on a 50/50 basis suggests that they have formed a C corporation, which allows for equal ownership and a more flexible management structure.

Todd and Cathy Created a Firm That Is a Separate