Scenario

You have worked contentedly for several years as a Certified Public Accountant at a well-respected firm in your city called Accurate Accounts. The owner, Anna Banks, who has operated as a sole proprietor for the past 30 years, advises you that she intends to retire at the end of this year. She has long been impressed with your work, and with the work of one of your colleagues, a fellow CPA, Penny White, with whom you get along well, and have an excellent professional and personal relationship.

Ms. Banks advises you that she is willing to allow you and Penny to take over the business at her retirement and to continue using the name Accurate Accounts. This is a well rated company, with excellent name recognition, and an existing client base. Penny states that she would like to remain as an employee, but it not comfortable running a business. Ms. Banks then offers you the opportunity to own the business, and after reviewing your financial situation, you agree to take over the business. At this time, Ms. Banks advises you that she has always run the business as a sole proprietorship, and she offers it to you as such. You purchase 100% of the company, including "business assets, inventory, equipment, and assets, as well as liabilities, known and unknown."

After much discussion about the scenario in the previous weeks, Penny White offers to provide you with the necessary capital to satisfy the client's $160,000 claim, in exchange for becoming your partner in the company. Having learned your lesson about sole proprietorships and personal liability you accept her offer on the condition that you form a Limited Liability Partnership of some kind. She is uncertain, and asks you to prepare minimally a 500-word explanation, in business letter form, to her as to why you want this new venture be established as a Limited Liability Partnership, and identify all advantages and disadvantages of a LLP, using two scholarly resources and in APA format.