PcM Mock-up test Question

I thought this question is asking what are the considerations to choose legal entity structure, and Level of risk would be the one of the most important thing. LLP, LLC, C-corporation etc.
for example, C corporation & LLC would protect each individuals, but LLP might not protect firm itself although it protects each partner from the liability.

And Why answer 1 should be the correct one? ‘Whether resources will be pooled between partner’ sounds like ethic and morale in the workplace.
Are there companies that don’t share data while working as partners? If so, why do they partner? Can’t we just run their own company?

Hello @jaechangko -

I agree that choosing a type of business such as a LLP, LLC, or C-Corp would determine how much the partners are protected from risk over time. However the question asks how much risk the firm itself is willing to take, not the partners of the business. This indicates a decision regarding if they would want to work with a well know litigious client for example, and would not affect the legal entity of the business.

In regards to the resources aspect of this question, many founding documents require that the partners outline their roles, and what resources they are bringing to the table.

Hopefully this helps, let me know if you need further clarification.


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