Question

raj is a 37 - year - old married businessman who runs a dry - cleaning business with three locations. he has many financial obligations: a home, the health care of his family, and his commitment toward saving for his three childrens college educations. raj knows that two of his locations require a large infusion of cash to pay for new and expensive dry - cleaning equipment. although his wifes job provides the family with health insurance, it also places the family in a higher income tax bracket. raj would certainly like to minimize his taxes. which form of business ownership would you suggest for him? select one: a. he should consider a sole proprietorship due to the fact that it has unlimited liability and it will protect the familys personal assets. b. he should consider a sole proprietorship due to the fact that it pays its own taxes and it has limited liability. c. he should consider a corporation because he can avoid the negative aspect of limited liability. corporations are always taxed at a lower rate than individuals. d. he should consider a limited liability company because he will only be liable for what he has invested in the business. his personal assets will be protected, and he can be taxed like a sole proprietorship.

Explanation:

A sole - proprietorship has unlimited liability, so options a and b are incorrect. Corporations are not always taxed at a lower rate than individuals. A limited - liability company (LLC) offers limited liability (protecting personal assets) and can be taxed like a sole proprietorship (pass - through taxation), which helps minimize taxes and protect personal assets for Raj.

Answer:

D. He should consider a limited liability company because he will only be liable for what he has invested in the business. His personal assets will be protected, and he can be taxed like a sole proprietorship.