Based on the characteristics of each type of business

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allow Jeb the freedom to not have to participate in the day to day operations of the store.Based on the characteristics of each type of business entity, Jeb and Josh would be personally liable to Jane for damages under a partnership because under a partnership, the partners are personally liable for all losses, including its partner’s losses (Kubasek, 2013). A sole proprietorship is not relevant as there are more than two partners in this case. Additionally, a corporation and an LLC are separate legal entities and the shareholders cannot be sued directly (Kubasek, 2013).
Lastly, the ability for Jeb’s personal creditors to seize the assets and/or profits of Arcadia Sports could happen. If they were an LLC, then the LLC can be sued, however, Jeb will only be obligated up to amount equal to the capital he has invested in Arcadia Sports. Under a partnership, Jeb’s creditors can obtain recovery against both Jeb and Josh as each partner is personally liable for each partner’s debts. Finally, under a corporation, creditors can seize the assets of Arcadia Sports but the shareholders of Arcadia Sports, if any, cannot be held liable.
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Term
Spring
Professor
ROSE
Tags
Business, Business Law, Corporation, Types of business entity, Legal entities, Limited Liability Company

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