A disadvantage of a partnership is that:
A) issuing stocks is expensive.
B) profits are taxed only once.
C) profits are taxed at a personal income level.
D) each partner is at risk for the actions of other partners.

Question

Quizplus · Accepted Answer

Partnerships do not issue stock, so A is incorrect. Profits in partnerships are indeed taxed only once and at a personal income level, making B and C incorrect. The correct answer is D because in a partnership, each partner is legally liable for the actions of the other partners, which can be a significant disadvantage.

A Disadvantage of a Partnership Is That