Question

Xavier and Shawn are co-owners of a party-planning business. They split all of the profits 50-50 and are able to make decisions that are binding on both parties. At one of their parties a guest is injured on a piece of equipment. The guest sues Xavier and Shawn, and they find they're personally liable for any damages. What kind of business structure do they have?

Question 19 options: Sole proprietorship, General partnership, Limited liability,] company, Corporation

Answer 1

The correct answer is a General Partnership.

In a general partnership both of the partners are responsible for the debts of the businesses. If the business cannot pay the damages then Xavier and Shawn will have to.

Answer 2

General partnership

Step-by-step explanation:

-Sole proprietorship is a type of business in which one person has the ownership and is personally responsible for all the debts.

-General partnership is a type of business in which two or more people share ownership but are also personally responsible for the debts.

-Limited liability company is a type of business structure in which the owners are responsible for the debts only to the amount they invested in the company.

-Corporation is a business that is created by a group of people and it is separated from them and has the goal of making profits.

According to this, the business structure that Xavier and Shawn have is a general partnership as they split all of the profits 50-50 and they are personally liable for any damage.