Read the information below about a food stall at a weekend market. Amir and Suki have each invested $3000. They will share the work, profit and business dec...
Question 1 Report
Read the information below about a food stall at a weekend market. Amir and Suki have each invested $3000. They will share the work, profit and business decisions. They are deciding whether to register as a partnership.
(a) Identify the proposed ownership structure. [1]
(b) Explain one benefit to Amir and Suki of using this structure. [2]
Answer Details
(a) The proposed ownership structure is a partnership. [1]
A partnership is owned by two or more people who agree to share aspects of the business, such as work, decisions, profits and losses. Amir and Suki are both investing and sharing these responsibilities.
(b) A benefit is that they can combine their capital. [1] Their combined investment can be used to buy more stock or better equipment than either might afford alone, which can increase the stall's production or selling capacity. [1]
Exam focus: Do not just state that partners “share money”. Explain what the larger combined amount enables the business to do.
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