Final answer:
The correct answer is A. A business arrangement where Basil Pappas and his brothers share ownership and investment cannot be a sole proprietorship, as this structure is for individually owned businesses. They could form a general partnership, LLC, or corporation instead to allow for shared investment and liability protection.
Step-by-step explanation:
Business Structures and Funding
When Basil Pappas decides to open his own restaurant and plans to ask his brothers for money in exchange for a share of ownership, he cannot form the business as a sole proprietorship. Sole proprietorship is defined as a business owned and operated by one person, where the owner is personally responsible for all debts and liabilities. In a sole proprietorship, the owner has total control and receives all the profits but also bears all the risks alone.
Alternative business forms that would allow for shared investment and ownership with his brothers might include a general partnership, a limited liability company (LLC), or a corporation. All these structures enable multiple individuals to contribute capital and share ownership and profits. General partnerships involve sharing both the responsibilities and rewards among owners, whereas LLCs and corporations provide some liability protection for the owners' personal assets.
When considering how new businesses obtain funding, it's common for entrepreneurs to use personal funds, loans, or seek out angel investors. Angel investors are affluent individuals willing to invest in the early stages of a company for a percentage of ownership.