Final answer:
The entrepreneurs should consider the advantages and disadvantages of continuing their partnership or incorporating. A partnership allows for shared responsibility and potential investors but carries personal liability and limited life. Incorporation offers protection from personal liabilities and greater capital-raising potential but entails more legal requirements.
Step-by-step explanation:
When considering whether to continue their partnership or incorporate, the two entrepreneurs should weigh the advantages and disadvantages of each option.
A partnership allows for shared responsibility in running the business and may attract investors more easily. However, partners are personally liable for each other's actions and debts, and the partnership may have a limited life if one partner leaves or dies.
Incorporation, on the other hand, provides protection from personal financial and legal liabilities and may offer a greater ability to raise capital. The company can continue to exist even if shareholders or directors change. However, incorporating involves more legal and administrative requirements.