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write a strong hypothesis for 4 individuals trying to execute a business formation whether a partnership...

write a strong hypothesis for 4 individuals trying to execute a business formation whether a partnership or a company should be selected and why

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Answer #1

Answer:

Hypothesis:

A company is the most suitable option for business formation as compared to partnership as it would provide larger benefits and little controversies.

Explanation:

A partnership is not a legal entity and it intends to involve high level of conflicts among the partners which may further lead to the dissolution of the business entity. Moreover, in partnership business, all the liability of the business will be on partners and not on the business. Partners will be taxed for the profits being generated by the business.

A company on the other hand is a separate legal entity and there are limited or no liability on the partners of the business. Such type of incorporation involves least conflict. Partners are not liable for the debts and losses of the company. Company is separately taxed for the profits being generated by it.

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