Question

Ross and Jerome have decided to start a small café that caters to the beach crowds in their coastal community. They don't have a lot of money to set up their business, but they know they need to set their business up with some legal protection that separates their personal assets from their business assets. Which form of business would be best for them?

Corporation
Limited liability corporation
Partnership
Sole proprietorship

Answer 1

Limited Liability Corporation (or LLC)

Step-by-step explanation:

Ross and Jerome's Café cannot be a Sole Proprietorship because they are two people. Still, they definitely don't want a Partnership since Partnerships do not separate personal assets from business assets. They could go with a Corporation, but Corporations are very costly, and Ross and Jerome don't have much money. Their best bet would be an LLC. Limited Liability Corporations are less expensive, have fewer regulations, less paperwork, and greater tax flexibility than Corporations all while maintaining the limited liability that makes them so appealing.

I took the quiz and got it right :) good luck!

Answer 2

LLC

or

Limited Liability Corporation

What I searched to get this answer-

Which form of business separates personal assets from their business assets?

What I got-

LLC

Most often, the best way to disentangle yourself from personal and business debts would be to form an LLC which can provide legal protection, enhanced credibility, and pass-through taxes. In the eyes of the law, a legally established LLC becomes a separate entity keeping business assets separate from personal assets.

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