Question

Franklin, John, Henry, and Harry have decided to pool their financial resources and business skills in order to open up and run a coffee shop. They will share any profits or losses that the business generates and will be personally responsible for making good on any debt that their business undertakes.

Answer 1

Answer:

A) Partnership

Explanation:

A partnership is a type of business where two or more people (called partners) come together and form one single company. The main advantages of forming a partnership are:

1. partnerships are easy to set up
2. since more than one person is involved, a partnership can gather more capital
3. the talents of the partners are shared
4. the partnership is not taxed directly, it is a pass through entity where the partners are taxed directly

The main disadvantage of forming a partnerships is that the partners are personally liable for all the partnership's debts and obligations.