Xavier and Shawn are co-owners of a party-planning business. They split all of the profits 50-50 and are able to make decisions that are binding on both parties. At one of their parties a guest is injured on a piece of equipment. The guest sues Xavier and Shawn, and they find they're personally liable for any damages. What kind of business structure do they have?

Question 19 options: Sole proprietorship, General partnership, Limited liability,] company, Corporation

The correct answer is a General Partnership.

In a general partnership both of the partners are responsible for the debts of the businesses. If the business cannot pay the damages then Xavier and Shawn will have to.

General partnership

Explanation:

-Sole proprietorship is a type of business in which one person has the ownership and is personally responsible for all the debts.

-General partnership is a type of business in which two or more people share ownership but are also personally responsible for the debts.

-Limited liability company is a type of business structure in which the owners are responsible for the debts only to the amount they invested in the company.

-Corporation is a business that is created by a group of people and it is separated from them and has the goal of making profits.

According to this, the business structure that Xavier and Shawn have is a general partnership as they split all of the profits 50-50 and they are personally liable for any damage.