Matt and alicia created a firm that is a separate legal entity and will share ownership of that firm on a 75/25 basis. which type of entity did they create if they have no personal liability for the firm's debts?

Question

Anabelle Delacruz

Business

2 July, 03:52

Matt and alicia created a firm that is a separate legal entity and will share ownership of that firm on a 75/25 basis. which type of entity did they create if they have no personal liability for the firm's debts?

+5

Answers (1)

Know the Answer?

Roy Henson · Answer 1

The type of entity that they created if they have no personal liability for the firm's debts would be: Corporation

In case of bankruptcy, a corporation must sell all of its assets to pay up the debt. But after all assets are liquidated, the debtor couldn't seek the payment further to the corporation's owner and have to accept the residual debt as a loss.