Ted and Fred are the owners of a gas station. They invested $150,000 each and pay an employee named Lawrence $35,000 per year. This year revenues are $900,000, while costs are $940,000. Who is legally responsible for bearing the $40,000 loss?A. Ted
B. Lawrence
C. Ted & Fred
D. Fred
E.Lawrence, Ted, and Fred.

Ted and Fred are in a partnership form of business ownership. According to the law of partnership, partners should share profits and losses equality unless specified otherwise in a partnership deed. In this scenario, Ted and Fred will share the loss equally or in the manner stated in their partnership agreement.

Lawrence is an employee. He does not share in the profits and losses of the business. Lawrence provides labor services to the partnership for which he earns a constant salary.