Final answer:
D & K Construction should become an LLC (Limited Liability Company) to limit their liabilities as it provides the benefit of protecting individual owners' personal assets in case the company fails, which is not typically afforded by a sole proprietorship or a general partnership.
Step-by-step explanation:
If D & K Construction wants to limit their liabilities, the most suitable option would be to become a LLC (Limited Liability Company). This business structure provides protection from liability to individual owners as the company is regarded as its own legal entity. It allows the benefit of limiting the partner's liability to their investment in the company, safeguarding the owner's personal assets, such as home, car, and personal bank accounts, if the company were to fail.
Other business structures, such as a sole proprietorship, make the owner responsible for all the company's debts and liabilities, which is not ideal for limiting liability. A partnership can be risky as well, as partners may be individually liable for the business's debts. A corporation also offers liability protection, but it is typically more complex and expensive to establish and maintain than an LLC.
Incorporation is typically sought to enjoy both the profit and the control of a business like a sole proprietorship, but without the associated personal financial and legal liabilities. It allows business owners to take risks while protecting their personal assets. A private company can be an LLC, a corporation, or even a sole proprietorship or partnership, depending on the goals and structure chosen by the business owners.