Question

Ben and James have been operating their advertising business as a partnership for the last three years. Business has been fairly good ever since they commenced. But now, with the recent trade war between China and the United States, the future of the advertising industry, as with just about all industries, looks dim. Concerned that a downturn in the economy could affect their business and render them personally liable for any losses sustained, Ben and James are contemplating on converting their partnership into a business entity that would shield them from any personal liability against such debts. However, both insist on running the business together, and with as little formalities as possible.

Required: Advise Ben and James on the type of business entity that would best suit their needs.

Answer 1

Answer) The type of business entity which would best suit Ben and James needs is LLC partnership. An LLC partnership Company can be defined as company which has limited liability and multiple members who can run the business together. In this type of entity, member's personal assets are protected in case of any debt or losses which the business incurrs and it is also convenient to form. In a minimum paperwork , a LLC partnership can be formed.The documents are-1) Articles of Association.

2-) Operating Agreement.

3-) Business Licence.

4-) Tax forms.