Question

Joel and Mike would like to start a new business selling a product new to the U.S., the Peraves Monotracer. Joel and Mike have done a considerable amount of research on this product, and think it would be successful in the U.S. However, they are still concerned about the risk of a new venture and both would like to avoid losing any personal assets. They should organize their firm as a _________.

Answer 1

They should organize their firm as a corporation.

Step-by-step explanation:

Joel and Mike would like to start a new business selling a product new to the U.S.

They have done a considerable amount of research on this product, and think it would be successful in the U.S.

Both would like to avoid losing any personal assets. They should organize their firm as a corporation.

Corporation is a legal entity which acts as a person. It is separate from its owners but enjoy most of the rights of a person. It has limited liability. It is funded by issuing shares to the stockholders.

A corporation can be for profit or not for profit. There are several types of corporations such as:

1. C corporations.
2. S corporations.
3. Limited Liability Companies (LLCs)
4. Nonprofit Organizations.