One drawback to a partnership is that it
A)generally has more access to capital than the sole proprietor.
B)is subject to double taxation.
C)has unlimited liability for each of the partners.
D)generally has more management expertise than the sole proprietorship.

Question

Quizplus · Accepted Answer

Partners in a partnership have unlimited liability for the debts and obligations of the business, which means they could potentially lose personal assets if the business is not able to meet those obligations. This is a significant disadvantage compared to a sole proprietorship, where the owner has limited liability. Option A and D are not drawbacks, but potential advantages of a partnership. Option B refers to a different type of business entity (a corporation) and is not relevant to partnerships.

One Drawback to a Partnership Is That It