Question

Darryl owns and operates Darryl's Dings and Dents, an auto repair shop where he repairs collision damage. Recently he was served with a lawsuit naming both him and the shop as defendants. The plaintiff claims that Darryl incorrectly reattached a fender on the plaintiff's car. The fender came loose while the plaintiff was driving, causing it to hit and damage the plaintiff's wheel and the plaintiff's car to strike a guardrail. The plaintiff was severely injured and is seeking damages of over $500,000.

Darryl's personal assets would be LEAST protected from the lawsuit if Darryl's Dings and Dents was organized as

a limited liability company.

a corporation.

a limited liability partnership.

a sole proprietorship.

Answer 1

a sole proprietorship.

Step-by-step explanation:

A sole proprietorship is a business belonging to one person. A sole proprietorship is popular due to its ease of set up and minimal fee required. The business owner only requires a permit from the local authorities. The owner makes all decisions without the need to consult anyone. He or she enjoys all the profits by themselves.

The biggest disadvantage with a sole proprietorship is that the owner has unlimited liabilities in the debts of the business. Liabilities of the business are his or her obligations. If the business is unable to meet its debts, the owner's personal properties can be used to settle the debt.