Which of the following statements regarding a partnership is true?

Question

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Partners in a partnership have personal liability for business debts and other legal obligations of the business. This means that if the business cannot pay its debts or is sued, the partners may be required to use their personal assets to satisfy those obligations. A partnership can be formed through a written agreement, but it is not required by law. A partnership is not a separate tax-paying entity for federal tax purposes; instead, the partners report their share of the partnership's income or losses on their individual tax returns.

Which of the Following Statements Regarding a Partnership Is True