Answer to Question #24505 in Economics of Enterprise for da sip

Question

Jane Doe, who has substantial personal wealth and income, is considering the possibility of starting a new business in the chemical waste management field. She will be the sole owner, and she has enough funds to finance the operation. The business will have a relatively high degree of risk, and it is expected that the firm will incur losses for the first few years. However, the prospects for growth and positive future income look good, and Jane plans to have the firm pay out all of its income as dividends to her once it is well established. Which of the legal forms of business organization would probably best suit her needs?

Answer 1

Jane Doe's needs would best suit a limited liability company as the legal forms of business organization. This legal form of company
provides limited liability to its owners and reduces the risk of the owner for
loss of other property in the event of unprofitable businesses.