Businesses can be classified into the following forms: sole proprietorship, partnership, corporation, limited liability company $($LLC$),$ and limited liability partnership $($LLP$).$

Different forms of businesses have different characteristics. Which of the following characteristics would apply to a partnership? Check all that apply.

Legal arrangement between two or more people

Can easily raise large amounts of capital

Subject to unlimited personal liability

Chartered by a state and is its own legal entity separate and distinct from its owners and managers

Income is allocated on a pro rata basis

Taxed at individual level

You come across different kinds of businesses every day. The following table describes some businesses. Using the description of each business, classify it as a sole proprietorship, a partnership, a corporation, or a limited liability company$/$limited liability partnership.

Business Scenario

Type of Business

Andrew founded and operated a wedding planning agency, which specialized in celebrity weddings. When he died, his business was dissolved because there was no plan for control after his death.

Rafael and his friend Shirley run a carpet cleaning business. They distribute the profits proportionately and file their individual taxes.

Rock Inc. is a mineral mining company. The CEO of Rock Inc. recently died. The news led to a short$-$term decline in the company$$s stock price, but it bounced back after the company announced its quarterly earnings.

Selena and Mario run a law firm in Chicago. The firm has debt of $$100,000,$ but Selena and Mario will not be held personally liable for the law firm$$s debt.