Question

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nicolas owns a bookstore in a small town in montana. nicolas has run the business as a sole proprietorship for years because there is little liability involved. when his sibling, manny, moves back to town, the two agree to work together to build the bookstore. manny invests some money, and the two manage the store together. what is the legal status of the store?
it continues as a sole proprietorship.
it becomes a general partnership.
it becomes a close corporation.
it becomes a limited liability company.

Explanation:

A general partnership is formed when two or more people agree to operate a business together, share management responsibilities, and one partner invests money. This is the case here as Nicolas and Manny agree to work together, manage the store together, and Manny invests money. A sole - proprietorship is a single - owner business. A close corporation has more formalities and legal requirements. A limited liability company also has specific formation and legal characteristics not met here.

Answer:

It becomes a general partnership.