Partnerships differ from sole proprietorships because partnerships
A)generate fewer profits than do sole proprietorships.
B)are characterized by unlimited liability and sole proprietorships are not.
C)consist of two or more partners sharing the responsibilities of the firm and sole proprietorships do not.
D)require a written agreement and sole proprietorships do not.
E)require a state charter and sole proprietorships do not.

Question

Quizplus · Accepted Answer

Partnerships consist of two or more partners sharing the responsibilities of the firm, whereas sole proprietorships are owned and operated by a single individual. Both partnerships and sole proprietorships have unlimited liability, meaning that the owner(s) are personally responsible for all debts and obligations of the business. While a written agreement is recommended for partnerships, it is not a legal requirement. Additionally, partnerships do not require a state charter, but some states may require registration or filing of partnership agreements.

Partnerships Differ from Sole Proprietorships Because Partnerships