Question

Marissa and raj are equal general partners in a business. They are content with their current management and tax situation but are uncomfortable with the idea of unlimited liability. If they wish to remain as the only two owners of the business, which form of business entity should they consider to replace their current arrangement?.

Answer 1

If they hope to keep enjoying their tax status but without unlimited liability, they should set up a limited liability company.

Features of a limited liability company.

• Partner liability is only limited to amount invested.
• Allows between two and more than a thousand partners.

If Merissa and Raj set up a limited liability company, they will no longer be bound by unlimited liability and can be the sole owners of the company.

In conclusion, they should set up a limited liability company.

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