Jonathan inherited a large amount of money from his uncle.Jonathan wishes to start his own business,and his lawyers encourage him to make it a corporation.What disadvantage of a sole proprietorship are the lawyers trying to avoid?
A) Unlimited liability
B) Lack of management skills
C) Retention of all profits
D) Lack of money
E) Double taxation

Question

Quizplus · Accepted Answer

By forming a corporation, Jonathan would avoid unlimited liability, which is a disadvantage of sole proprietorships. As a sole proprietor, Jonathan would be personally liable for any debts or legal issues related to the business, putting his personal assets at risk. By forming a corporation, Jonathan would have limited liability, protecting his personal assets.

Jonathan Inherited a Large Amount of Money from His Uncle