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Question
Jonathan owns and operates a successful sole proprietorship. A friend, who owns a similar business, suggests that they combine their businesses and form a new partnership. Which of the following should Jonathan consider before making a decision?(1 point)
Responses

When Jonathan and his friend pool their resources, they will each gain some control over the decision-making process; however, the new business will likely grow slower than the sole proprietorship.
When Jonathan and his friend pool their resources, they will each gain some control over the decision-making process; however, the new business will likely grow slower than the sole proprietorship.

When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.

Jonathan will gain more control over decision-making by partnering with his friend; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
Jonathan will gain more control over decision-making by partnering with his friend; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.

When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, Jonathan will lose some of the control over decision-making that he currently enjoys.

User Icon for Bot GPT 4-o mini Bot GPT 4-o mini answered
11 days ago

When considering the potential partnership with his friend, Jonathan should weigh the implications of combining their businesses. The most relevant points for Jonathan to consider would include:

1. **Loss of Control**: By entering into a partnership, Jonathan would share decision-making authority with his friend, which means he would lose some control over his business decisions compared to operating as a sole proprietor.

2. **Business Growth Potential**: Pooling resources with his friend may provide synergies that could foster faster growth than either business could achieve individually.

3. **Regulatory Burden**: Operating as a partnership may involve more regulatory requirements and complexity compared to the relatively straightforward structure of a sole proprietorship.

Based on these considerations, the most appropriate response Jonathan should focus on is:

**"When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, Jonathan will lose some of the control over decision-making that he currently enjoys."**

This answer encapsulates the essential trade-off Jonathan faces in moving from running a sole proprietorship to entering into a partnership.