Question

If a person wants to start a business but limit the amount of liability he is responsible for, a _____________ would be most appropriate.a. Sole proprietorship b. Partnership c. Joint venture d. Corporation

Answer 1

Answer:

If a person wants to start a business but the limit the amount of liability he is responsible, Option D, Corporation would be most appropriate.

Explanation:

In corporation or a limited liability corporation, one doesn’t need to liquidate his/her personal assets to cover the debt in case the business goes bankrupt. A corporation is a company or group of people that can act legally as a person or single entity. Because of this, the owners of the corporation have limited amount of legal liability for the corporation's business activities and debts.

In sole proprietorship, person who owns the business is responsible for his debts and has unlimited liability. Similarly, in partnership and joint venture also, person is liable for the debts. So, out of the given options, Option D is the correct answer if person wants to limit his liability.