Alicia and Geraldo operate a large company that includes multiple shareholders who require regular reporting. What form of business ownership have they established for their company?
1) Corporation
2) Partnership
3)Limited liability company
4)Sole proprietorship
Is it 1, 2, 3, or 4?
The form of business ownership they have established for their company is 1) Corporation.
Based on the information provided, Alicia and Geraldo have established a form of business ownership known as a Corporation (option 1).
To determine the correct answer, let's analyze the options provided:
1) Corporation: A corporation is a legal entity that is separate from its owners and is owned by shareholders. Shareholders in a corporation receive regular reporting through financial statements and meetings. Therefore, this option could be a potential answer.
2) Partnership: In a partnership, the business is owned and operated by two or more individuals. While partners may have reporting obligations to each other, there is usually no requirement to report to shareholders. So, this option is less likely to be the answer.
3) Limited liability company (LLC): An LLC is a hybrid business structure that combines elements of a corporation and a partnership. Like a corporation, an LLC can have multiple owners (known as members) and may provide regular reporting to its members. This option could be correct if Alicia and Geraldo have established an LLC.
4) Sole proprietorship: A sole proprietorship is a business owned and operated by a single individual. Since this option implies that Alicia and Geraldo are the sole owners, it does not align with the statement that their company includes multiple shareholders who require regular reporting. Thus, this option is unlikely to be the answer.
Based on the analysis, the most appropriate option seems to be 3) Limited liability company (LLC). However, without further context or information, we cannot definitively determine the answer.