Question

When Luke, Larry, and Lance lost their jobs during the recent recession, they pooled their resources, borrowed a little more, and bought a couple of houses to renovate. All three were concerned about the risk involved in owning their own business, particularly the risk of losing personal assets. As their advisor, which of the following forms of business ownership would you recommend?a) Limited liability company
b) Sole proprietorship
c) General partnership
d) Master limited partnership

Answer 1

Answer:

a) Limited liability company

Explanation:

Considering the options given, as an advisor the form of business that I would recommend is: limited liability company that is a structure in which the owners  are not responsible with their personal assets for the company's debts as the three owners are concerned about this risk.

I would not advise the other forms of business because the sole proprietorship is a firm that is run by one person, the general partnership is a structure in which two or more people agree to share unlimited liability which means that they share all their personal assets and are responsible for any debt the company has with them and the master limited partnership is a company that trades securities in the market.