Limited partnerships are not as prevalent as corporations because:
A)limited partners can lose up to three times the amount they invested in the partnership if the business goes bankrupt.
B)limited partnerships have the disadvantage of double taxation.
C)the general partner has no liability,making it difficult for the partnership to borrow money.
D)it is easier to transfer ownership by selling common stock than it is to sell the partnership.

Question

Quizplus · Accepted Answer

Limited partnerships have limitations on transferring ownership, as it requires the consent of all partners, making it difficult for them to sell their share. On the other hand, corporations have the advantage of being able to issue and sell common stock, making it easier to transfer ownership. Therefore, limited partnerships are less prevalent compared to corporations. A is incorrect as limited partners have limited liability and can only lose the amount they invested. B is incorrect as double taxation is a disadvantage of corporations, not limited partnerships. C is incorrect as the general partner has unlimited liability in a limited partnership.

Limited Partnerships Are Not as Prevalent as Corporations Because