Mario and Johnny want to start a business. They have very little capital. They are new partners and largely unfamiliar with each otherâ€™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?

A) Unfamilar with each other's managment practices

B) Avoiding full liability

C) Little Capital

D) Sharing profits

Question

Sherlyn Medina

Business

1 December, 08:15

Mario and Johnny want to start a business. They have very little capital. They are new partners and largely unfamiliar with each otherâ€™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?

A) Unfamilar with each other's managment practices

B) Avoiding full liability

C) Little Capital

D) Sharing profits

+3

Answers (1)

Know the Answer?

Mikayla Friedman · Answer 1

All Options ... if not possible then D) Sharing profits

Explanation:

A General Parnership refers to a business arrangement in which the individuals agree to share all the as assets, profits, and financial and legal liabilities of a jointly-owned business. Therefore in this scenario all of the options listed are valid reasons to want to create a general partnership between Mario and Johnny, but if only one option can be chosen then the best reason would be Sharing profits. That is because the entire reason for starting a business is to make money, and thus protecting your entitled profits is the most important.