Marco Valez is comparing forms of business structure in order to make the best decision for the business he plans to form next month. He plans to be the only investor/owner, and he will also actively manage the business. He is convinced that the company will be profitable, so he wants to keep all of the after-tax earnings for himself. Which of the following forms of business ownership is Marco most likely to choose?
A) limited liability company
B) sole proprietorship
C) corporation
D) limited partnership

Question

Quizplus · Accepted Answer

A sole proprietorship is the simplest and least expensive type of business structure. As the sole owner, Marco would have complete control over the business and would be able to keep all of the after-tax earnings for himself. Additionally, there is no legal or financial separation between the owner and the business, so income and expenses are reported on the owner's personal tax return. This type of structure would also allow Marco to avoid the legal formalities and costs associated with forming a corporation or limited liability company.

Marco Valez Is Comparing Forms of Business Structure in Order