Question

Shelby and her sister Isa want to go into business together selling beauty products. They have agreed to share the risks and profits associated with their new business endeavor, what type of business ownership should they set up?

Answer 1

They decided to set up a partnership.

Step-by-step explanation:

Two persons agreeing to share the risks and profits of their business

Answer 2

Shelby and Isa should form a general partnership. Some of the advantages of general partnerships are:

1. partnerships are easy to form and don't require a lot of paperwork
2. partnerships have simple structures, usually the partners participate in the business activities of the partnership
3. the partnership's profits and losses are passed to the partners (no double taxation)
4. partnerships can be easily dissolved

Although the largest disadvantage of general partnerships is unlimited liability, every partner is liable for all of the partnership's debts and obligations.

Step-by-step explanation: