Which of the following statements best describes partnerships?
A)Corporations are at a disadvantage relative to partnerships because they have to file more reports to regulatory agencies, even if they are not publicly owned.
B)In a regular partnership, liability for the firm's debts is limited to the amount a particular partner has invested in the business.
C)A fast-growth company would be more likely to set up as a partnership for its business organization than would a slow-growth company.
D)There must be at least one person acting as a general partner in a limited partnership.

Question

Quizplus · Accepted Answer

In a limited partnership, there must be at least one general partner who has unlimited personal liability for the firm's debts and one or more limited partners who only risk losing the amount they have invested in the business. Option A is incorrect because corporations must file more reports to regulatory agencies because of their status as publicly owned entities. Option B is incorrect because in a regular partnership, partners are personally responsible for the firm's debts. Option C is incorrect because a fast-growth company is more likely to choose a corporate structure to access capital markets and other benefits.

Which of the Following Statements Best Describes Partnerships