Question

Becca and Bob own a car rental business. Becca contributes 75 percent of the capital but does only 20 percent of the work, while Bob contributes 25 percent of the capital but does 80 percent of the work. Both decide on a 50/50 allocation of profits. In which types of business structures would this arrangement be possible?a) limited liabilities and partnershipsb) S corporations and partnershipsc) sole proprietorships and limited liabilitiesd) S corporations and sole proprietorshipse) S corporations, limited liabilities, and partnerships

Answer 1

Answer: Limited liabilities and partnerships

Explanation:

Limited liabilities mean that the partners within the firm are only liable to pay off their debts with the amount they had invested as capital in the company. Partnership is an agreement between certain number of partners to share the profit and loss of the company. In this case since there is a 50/50 allocation of profits and there are only 2 partners therefore, this is a limited liability partnership.