Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50-50 basis.Which type of entity did they create if they have no personal liability for the firm's debts?
A)Limited partnership
B)Corporation
C)Sole proprietorship
D)General partnership
E)Public company

Question

Quizplus · Accepted Answer

Todd and Cathy created a corporation, which is a separate legal entity that provides limited liability to its shareholders. As they share ownership on a 50-50 basis, it suggests that they have formed a closely-held corporation. In this type of corporation, the shares are not publicly traded, and ownership is limited to a few individuals.

Todd and Cathy Created a Firm That Is a Separate