Which of the following statements is CORRECT?
A) Corporations are at a disadvantage relative to partnerships because they have to file more reports to state and federal agencies, including the Securities and Exchange Administration, even if they are not publicly owned.
B) In a regular partnership, liability for the firm's debts is limited to the amount a particular partner has invested in the business.
C) A fast-growth company would be more likely to set up as a partnership for its business organization than would a slow-growth company.
D) Partnerships have difficulty attracting capital in part because of their unlimited liability, the lack of impermanence of the organization, and difficulty in transferring ownership.
E) A major disadvantage of a partnership relative to a corporation as a form of business organization is the high cost and practical difficulty of its formation.

Question

Quizplus · Accepted Answer

Partnerships have unlimited liability, which means that partners are personally responsible for the debts and obligations of the partnership. This can make it difficult to attract capital, as potential investors may be hesitant to risk their personal assets. Additionally, partnerships are typically less impermanent than corporations, which can make it challenging to transfer ownership and can also make it difficult to attract investment capital.

Which of the Following Statements Is CORRECT