Which of the following is a disadvantage of partnership firms?
A) They cannot be dissolved without the permission of the SEC.
B) They are taxed at multiple levels: corporate level and individual level.
C) They have more difficulty in raising capital as compared to a sole proprietorship.
D) They have mutual agency which creates personal obligations for each partner.

Question

Quizplus · Accepted Answer

Partnerships involve mutual agency, where each partner can make decisions that affect the whole firm, creating personal obligations for all partners. This is a unique disadvantage compared to other business structures.

Which of the Following Is a Disadvantage of Partnership Firms