Which of the following statements is correct?
A)In a partnership, liability for other partners' misdeeds includes but is limited to the amount a particular partner has invested in the business.
B)Partnerships must be formed according to specific rules, which include the filing of a formal written agreement with state authorities where the partnership does business.
C)A fast growth company would be more likely to set up a partnership for its business organization than would a slow-growth company.
D)Under partnership law, if any partner is unable to meet his or her pro rata claim in the event the partnership goes bankrupt, the remaining partners must make good on the unsatisfied claims.
E)A major disadvantage of a partnership as a form of business organization is the high cost and practical difficulty of its formation.

Question

Quizplus · Accepted Answer

Under partnership law, partners have joint and several liability. This means if any partner cannot meet their financial obligations in the event of bankruptcy, the remaining partners are responsible for covering the shortfall.

Which of the Following Statements Is Correct