Jim Smith and Bob Jones recently decided to start their own car wash business.Jim's spouse and Bob's spouse both work for the same law firm each receives a salary exceeding $200,000 annually.Jim and Bob anticipate that the business will not be profitable for a few years but rather operate at a loss.Both Jim and Bob will both be working in the business.Based on these facts, the best form of business organization for the car wash would be:
A)A limited liability company
B)AC corporation
C)A partnership
D)A sole proprietorship

Question

Quizplus · Accepted Answer

A limited liability company (LLC) would be the best form of business organization for Jim and Bob's car wash because it would provide personal liability protection for both owners against any business debts or liabilities. Additionally, an LLC allows for flexibility in management and tax benefits, which would be useful for their situation where the business may not be profitable for a few years. The other options (B) a C corporation, (C) a partnership, and (D) a sole proprietorship, do not offer the same level of liability protection and/or tax benefits as an LLC.

Jim Smith and Bob Jones Recently Decided to Start Their