Question

Vic and Ruthann are starting Victory Signs which will manufacture signs. If their primary objective is to ensure that they will be able to easily transfer ownership of Victory, which form should the choose?

a. Sole proprietorship,
b. General partnership,
c. Close corporation,
d. Corporation.

Answer 1

Vic and Ruthann should choose a corporation as their business formation if they want to easily transfer ownership, as it allows for buying and selling of shares without significant legal hurdles.

Step-by-step explanation:

If Vic and Ruthann's primary objective for Victory Signs is the ease of transferring ownership, the best form of business organization they should choose is a corporation. Unlike a sole proprietorship or a general partnership, where ownership transfer can be complex and limited, a corporation provides the structure to easily facilitate the buying and selling of shares, allowing for smoother transition of ownership. In a corporation, owners are shareholders who can transfer their shares to others without significant legal hurdles or impact on the business's operations. This is especially true if they consider a public corporation where shares are traded on the stock market. However, even in a private corporation, although no publicly issued stock exists, share transactions can still be more straightforward than other business structures.