A:

Ronnie has just created her own publishing company and, as the sole owner, she wants to protect her personal assets in a simple business structure. Which of the following would be an appropriate choice?



A) Limited liability company
B) Sole proprietorship
C) Corporation
D) Limited partnership



The correct answer is a.
A Limited Liability Corporation (LLC) will offer Ronnie protection for her personal assets if the company should fail. She is currently operating as a sole proprietor, with no liability protection. Ronnie does not qualify for either a limited partnership or general partnership since both require a minimum of two people. The LLC also has a more simplified business structure than a corporation and is, thus, easier to administer.
RELATED FAQS
  1. What's the difference between a financial plan and a financial forecast?

    Learn which types of business structures present the greatest amount of risk through unlimited liability to the owner or ... Read Answer >>
  2. Do companies have to pay back their paid-up capital?

    Learn what business structures are available to entrepreneurs, and learn the process for making the most appropriate selection ... Read Answer >>
  3. How can I merge technical analysis and fundamental analysis with quantitative analysis ...

    Understand the benefits a self-employed individual can gain through registering a sole proprietorship as a limited liability ... Read Answer >>
  4. If you have a house that is under your company name and you want to sell it back ...

    The answer to this question really depends on the type of legal entity your business is operated through. Businesses may ... Read Answer >>
  5. Can a Limited Liability Company (LLC) issue stock?

    Learn about a limited liability company, or LLC, and if it is able to issue stock. Understand the benefits of an LLC, both ... Read Answer >>
Related Articles
  1. Small Business

    Understanding Limited Liability

    Limited liability is a legal concept that protects equity owners from personal losses due to their ownership interest in the company.
  2. Investing

    The Basics of Forming A Limited Liability Company (LLC)

    An LLC is a good combination of protection with flexibility and tax benefits. It provides an array of taxation alternatives while shielding individual members from personal liability.
  3. Trading

    Asset Protection For The Business Owner

    Could incorporating your business help protect it? Find out here.
  4. Small Business

    Which Type of Organization Is Best For Your Business?

    Learn the differences between the types of business organizations so you can determine how to best structure your business for tax and liability limitations.
  5. Small Business

    Should You Incorporate Your Business?

    Find out how becoming a corporation can protect and further your finances.
  6. Small Business

    What's a Sole Proprietorship?

    A sole proprietorship is an unincorporated business that has one owner who pays the taxes on the profits of that business.
  7. Insurance

    Real Estate Trust or LLC? Helping Landlords Choose

    Once you’ve bought property, are you protected legally against the liabilities that come with renting it out? Here's how to make sure you're covered.
  8. Investing

    LLC Vs. Incorporation (Inc.): Which Should I Choose?

    Learn about the advantages of forming an LLC over a corporation, including ease of administration. Read about the advantages that a corporation may offer.
  9. Taxes

    S Corp. Vs. LLC: Which Should I Choose?

    Understand the major distinctions between an S corporation and an LLC, and the important factors to consider when choosing your business structure.
  10. Small Business

    What is Unlimited Liability?

    Unlimited liability means that the owners of a business are liable for the entire amount of debt and obligations of that business.
RELATED TERMS
  1. Limited Liability Company - LLC

    A corporate structure whereby the members of the company cannot ...
  2. Company

    An entity formed to engage in a business. A company may be organized ...
  3. Sole Proprietorship

    The sole proprietor is an unincorporated business with one owner ...
  4. Firm

    A firm is a business organization, such as a corporation, limited ...
  5. Limited Liability

    A type of liability that does not exceed the amount invested ...
  6. Business Liability Insurance

    Insurance that protects a company and/or business owner in the ...
Hot Definitions
  1. Quadruple Witching

    The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock ...
  2. Co-pay

    A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such ...
  3. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  4. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  5. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  6. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
Trading Center