Question

"You get in a conversation with a man in the reception room at your doctor's office. He tells you he is establishing a barbershop business and has a business partner who shares in all decision making. The business has been fairly easy to set up, he has limited liability for the company and will only be taxed once on company profits. What kind of business has your new acquaintance described to you?

Answer 1

Answer:

The answer is Limited liability partnership (LLP)

Explanation:

A LLP is a form of partnership where the majority of all partners have limited liabilities. A LLP possesses the characteristics of both a corporation and a partnership. Each partner in a LLP is not liable for negligence or misconduct of another partner. In the event of business failure, the personal properties of partners in a LLP are protected against legal action. Moreover, taxation of partners’ earnings in a LLP is done only once, that is, on the firm’s profit.