Question

In: Finance

Louise Layton plans to open​ Louise's Floral Designs. She is considering the various types of business...

Louise Layton plans to open​ Louise's Floral Designs. She is considering the various types of business organizations and wishes to organize her business with unlimited life and limited liability features. Which type of business organization will meet​ Louise's needs​ best?

A.

A partnership would have an indefinite life.

B.

The limited liability of a corporation would protect​ Louise's personal assets and provide an unlimited life to the business.

C.

The limited liability of a proprietorship would protect​ Louise's personal assets.

D.

A proprietorship would allow Louise to share ownership with a friend.

Solutions

Expert Solution

Sol:

Business with unlimited life and limited liability features will be B:

B. The limited liability of a corporation would protect​ Louise's personal assets and provide an unlimited life to the business.

A limited liability corporation (LLC) is a separate entity, like a corporation, that can legally conduct business and own assets. The LLC must have an operating agreement which regulates its business activities and the relationship among its owners / members. The important feature of the LLC is that all members obtain limited liability. A limited liability company protects its members from personal liability for the debts and actions of the business. The LLC is dissolved in the event of transfer of interest or death, unless members vote to continue the LLC give it an unlimited life to the business.

Therefore limited liability of a corporation will meet​ Louise's needs​ best.

Answer is B. The limited liability of a corporation would protect​ Louise's personal assets and provide an unlimited life to the business.

jeff jeffy answered 1 year ago
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