Question

Mario and Johnny want to start a business. They have very little capital. They are new partners and largely unfamiliar with each other’s management practices. They are happy, however, to be organizing a business together in order to avoid full liability for the business. Which detail of this situation is a good reason for Mario and Johnny to create a general partnership?

Answer 1

Answer:

avoid full liability for the business

Explanation:

Based on the scenario being described, the best reason for Mario and Johnny to create a general partnership is that they want to avoid full liability for the business. This makes creating a general partnership great since this is a business arrangement by two or more individuals who agree to share in all assets, profits, and financial and legal liabilities of a jointly-owned business, meaning sharing all liability for the business as well.