Question

Leonardo runs a septic tank repair and installation company. On a job, one of his employees cracked a septic line whose outflow damaged a private home. In the lawsuit that ensued, Leonardo’s company had to pay $100,000 in damages to the homeowner. However, Leonardo himself was not personally liable for the damages. Based on this scenario, what form of business does Leonardo’s septic tank company most likely represent?

(1 point)
Responses

corporation

corporation

partnership

partnership

sole proprietorship

sole proprietorship

franchise

Answer 1

Based on the scenario provided, where Leonardo’s company had to pay damages to a homeowner but Leonardo himself was not personally liable, it suggests that the company is structured in a way that protects the owner from personal liability.

This protection is typically characteristic of a **corporation**. In a corporation, the business is considered a separate legal entity, which means that the owners (shareholders) are not personally liable for the debts and liabilities of the company.

Therefore, the correct response is:

**corporation**