Mary has developed a diet pill for obesity.She wants to create a new company with a major drug company.She is concerned about liability if someone becomes sick or dies after using the diet pill.What is the best form of business organization for the new company?
A)A sole proprietorship
B)General partnership with Mary and the drug company as equal partners
C)S-type corporation with Mary and the drug company owning equal shares
D)Limited liability company with Mary and the drug company owning equal s hares

Question

Quizplus · Accepted Answer

A limited liability company (LLC) would be the best form of business organization for the new company. With an LLC, Mary and the drug company would enjoy limited liability protection, meaning that their personal assets would not be at risk if the company were sued. Additionally, an LLC provides flexibility in terms of management structure and tax implications, making it an ideal choice for a business venture involving two different entities. A sole proprietorship would not provide liability protection, and a general partnership would leave both Mary and the drug company personally liable for any issues with the diet pill. An S-type corporation could also work, but an LLC provides more flexibility and ease of setup.

Mary Has Developed a Diet Pill for Obesity