Corporate Finance

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Choice of Business Entity


You and your friend are starting a business together. You are deciding on your business' type of organization. Both of you will supply the capital, but you do not want the business' obligations to be your own personal obligations, and you both want to be actively involved in the business' operations. What type of organization should you select?


A partnership because more than one person will own and run the business.


A limited liability partnership (LLP) because you want to protect your own personal assets from your business's creditors.


A proprietorship because you will both own the company.


A limited liability company (LLC) or corporation because you both want to protect your personal assets and run the business.