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5. Nazih and Ovidia are deciding what form their new business should take. They need to...

5. Nazih and Ovidia are deciding what form their new business should take. They need to raise a lot of capital quickly and plan to sell ownership shares of their business to a group of sophisticated investors who do not want to participate in managing the business. It is important to those potential investors that the laws governing the new business be predictable and well-established in case a dispute arises later on. Taking into account these factors, Nazih and Ovidia should choose the following business form: a. corporation.

b. LLLP.

c. LLC.

d. LLP.

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Answer #1

A corporation is defined as an organization. It is an organization of a group of people or a company that is authorized by the state to work or act as a single entity. The ownership interest in the corporation is availed by purchasing or owning shares. In the provided case, Nazih and Ovidia need to raise capital by selling ownership shares. Hence, they must be willing to open a corporation. Therefore, the correct option is (a). All other options are wrong as they do not involve ownership shares.

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