Question

Farrick and Kenley want to form a business in which they invest money in exchange for stock ownership in their organization. What type of business entity do they wish to form

Answer 1

Farrick and Kenley are intending to create a corporation, a business owned by shareholders with limited liability. In this structure, they can invest money and receive shares of stock, representing partial ownership of the company.

Step-by-step explanation:

Farrick and Kenley are looking to form a business entity where they can invest money and in return, obtain stock ownership in their company. The type of business structure they are interested in forming is known as a corporation.

A corporation is a business that is owned by shareholders, who are individuals that own shares, or portions of the company's stock. These shareholders have limited liability for the company's debt but are entitled to a share of the profits, and potentially losses, that the corporation may experience.

Corporations can be either private or public entities, and they have the ability to raise additional financial capital either through selling more stock or issuing bonds. Therefore, by starting a corporation, Farrick and Kenley can become shareholders in their newly created business.

Answer 2

Limited liability company

Step-by-step explanation:

In simple words, A limited liability corporation (LLC) is a type of private company structure. It's among the most frequent legal structures for forming a company. In a comprehensive partnerships all members are accountable for the firm and have unlimited accountability for its obligations.

Thus the limited liability structure is most suitable for the two.