Which of the following statements best describes partnerships?
A) In a regular partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business.
B) Partnerships have trouble attracting large capital due to such facts as unlimited liability, and the illiquidity of partnership interests.
C) A slow-growth company, with little need for new capital, would be more likely to organize as a corporation than would a faster-growing company.
D) A major disadvantage of all partnerships relative to all corporations is the fact that taxes must be paid by the partners rather than by the firm itself.

Question

Quizplus · Accepted Answer

Partnerships have unlimited liability, meaning that all partners are liable for the debts and obligations of the partnership, not just their individual investment. This can make partnerships less attractive to investors who are looking for limited liability. Additionally, partnership interests are not as liquid as stocks in a corporation, making it harder to attract large amounts of capital.

Which of the Following Statements Best Describes Partnerships