The disadvantages of the partnership form of business organization, compared to corporations, include
A) The legal requirements for formation.
B) Unlimited liability for the partners.
C) The requirement for the partnership to pay income taxes.
D) The extent of governmental regulation.
E) The complexity of operations.

Question

Quizplus · Accepted Answer

The main disadvantage of a partnership is that the partners have unlimited personal liability for the debts and obligations of the business. This differs from corporations where shareholders are typically only liable for the amount of their investment. Shareholders in a corporation generally have limited liability protection.

The Disadvantages of the Partnership Form of Business Organization, Compared