Caitlin is meeting with a business advisor to discuss how she should structure the ownership of her new business. When the advisor asks Caitlin if she’s prepared to pay any potential debts out of her own pocket, she tells him that she is unsure. Before deciding which ownership structure would be best for her business, Caitlin must determine the level of _____ she is willing to take. (1 point) Responses profits profits continuity continuity risk risk capital needs
risk
The level of risk Caitlin is willing to take needs to be determined before deciding on the ownership structure for her business.
Before deciding the ownership structure for her business, Caitlin needs to determine the level of risk she is willing to take.
To determine the level of risk, Caitlin should consider whether she is willing to be personally responsible for paying any potential debts out of her own pocket. If she is comfortable taking on personal liability for the business's debts, she may choose a structure with unlimited liability, such as a sole proprietorship or general partnership. This means that if the business cannot cover its debts, Caitlin's personal assets can be used to settle the debts.
On the other hand, if Caitlin prefers to limit her personal liability and separate her personal assets from the business's debts, she may opt for a limited liability structure like a corporation or limited liability company (LLC). In these structures, the owners' personal assets are generally protected from business debts.
By determining her risk tolerance, Caitlin can make an informed decision about how to structure the ownership of her new business.