Five accountants have formed an organization within which they will provide their services.What type of organization have they most likely chosen and why?
A) They have formed a corporation in which members are liable for their own malpractice but not for the malpractice of other members.
B) They have formed a partnership because members are not liable for their own malpractice or for the malpractice of other members because recovery for malpractice may only be obtained from assets of the partnership itself.
C) They have formed a limited liability partnership because members are liable for their own malpractice but not for the malpractice of other members.
D) They have formed a corporation because the tax structure is most beneficial to the five of them this way.

Question

Quizplus · Accepted Answer

The accountants have most likely formed a limited liability partnership (LLP) because this type of organization provides each member with liability protection from the malpractice of other members, while still allowing each member to be responsible for their own actions. Additionally, LLPs are commonly chosen by professional service providers, such as accountants, as they allow for flexibility in management and taxation.

Five Accountants Have Formed an Organization Within Which They Will