A disadvantage of partnerships is the mutual agency of all partners.

Question

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In a partnership, each partner has the authority to bind the partnership and make decisions on behalf of the other partners. This means that if one partner makes a mistake or enters into a risky contract, all partners are equally responsible and may be held liable. This is known as mutual agency, and it can be a disadvantage for some partners who do not want to be held responsible for the actions of others.

A Disadvantage of Partnerships Is the Mutual Agency of All