William and Theodore have decided to start a travel business called Excellent Adventures. Since their business primarily involves time-travel their clients may be harmed during a small but significant portion of the travels. Consequently, William and Theodore would like a business form that will shield their personal wealth from any legal claims that the firm might be subject to after one of the travel mishaps. If William and Theodore are the only investors in this U. S. domiciled firm, which legal form of organization would be best for Excellent Adventures to protect both William and Theodore? a. Limited Partnership b. Sole Proprietorship c. Partnership d. Corporation

Question

Business

China

7 March, 13:39

William and Theodore have decided to start a travel business called Excellent Adventures. Since their business primarily involves time-travel their clients may be harmed during a small but significant portion of the travels. Consequently, William and Theodore would like a business form that will shield their personal wealth from any legal claims that the firm might be subject to after one of the travel mishaps. If William and Theodore are the only investors in this U. S. domiciled firm, which legal form of organization would be best for Excellent Adventures to protect both William and Theodore? a. Limited Partnership b. Sole Proprietorship c. Partnership d. Corporation

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Devan Lang · Answer 1

Corporation

Explanation:

The reason is that the company provides laibility shield and also a great opportunity to raise finance through listing in the stock exchange. Furthermore the tax rates in the limited partnerships is higher than the companies required that the profits are not distributed to its shareholders. However in the corporation legal form can be used to defer the income tax by not issuing dividends and reinvesting that money in the business (Tax benefits).

So the best legal form of business is corporation.