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[Tutoring Concerns] André and Sasha Want to Go into Business

question 89

Multiple Choice

[Tutoring Concerns] André and Sasha want to go into business together and plan on offering a tutoring service to high school and college students. André proposes that they share control of the business and split profits equally and not bother with a written agreement. Sasha, however, is concerned about being able to pay their debts, since they will have to rent tutoring space, and purchase computers and supplies. She is also concerned about parents and students who may sue if their test scores do not improve. She tells André that she just bought a new boat and car, and that she does not want her assets to be in jeopardy. She tells André that they should form a corporation to shield their personal assets. André, however, tells Sasha that their personal assets are not in danger with his proposal because they are a business and that, furthermore, forming a corporation would result in a tax being imposed twice.
-Is André correct in his assertion that by sharing control of the business and splitting profits equally there could be no personal liability for debts?

Definitions:

Basal Ganglia

A group of structures in the brain involved in coordinating movement and behavior, playing a key role in learning and emotions.

Hippocampus

A major component of the brain, playing crucial roles in memory formation, spatial navigation, and the processing of emotions.

Explicit Memories

Memories that can be consciously recalled, such as facts and personal experiences.

Hippocampus

A structure in the brain associated with the formation of new memories and is involved in learning and emotions.