Question

Dan and Emily have decided to start a new home inspection business. They have both worked in this industry as sole proprietors, but now, they want to join forces to share in the management of the business. They will both have unlimited liability for the debts of the business. What type of business is this?

Answer 1

Answer: Partnership

Explanation: In simple words, partnership refers to an agreement between two or more independent parties to join their forces for achieving a common business goal with the ultimate objective of earning profit.

In the given case, Dan and Emily were sole proprietors and now they are joining their forces also the case states their new entity will not be a separate entity and both of the owners will be having unlimited debt.

Hence from the above we can conclude that this is a partnership business.