A partnership:
A) Is also called a sole proprietorship.
B) Has to have a written agreement in order to be legal.
C) Has unlimited liability for its partners.
D) Is a legal organization separate from its owners.
E) Has owners called shareholders.

Question

Quizplus · Accepted Answer

A partnership has unlimited liability for its partners, meaning that each partner is personally responsible for the debts and obligations of the partnership. This can put personal assets of the partners at risk in the event of lawsuits or bankruptcy. The other choices are incorrect: A is incorrect because a sole proprietorship is a business owned by one person, not a partnership; B is incorrect because partnerships do not necessarily require a written agreement, although it is recommended; D is incorrect because partnerships are not separate legal entities like corporations; E is incorrect because shareholders are owners of a corporation, not a partnership.

A Partnership