Which of the following is not an advantage of a partnership (relative to a sole proprietorship)
A) inexpensive to set up
B) makes financing easier
C) benefits from diverse management talents
D) limited liability

Question

Quizplus · Accepted Answer

A partnership does not offer limited liability protection to its partners, which is a significant disadvantage relative to a sole proprietorship. In a sole proprietorship, the owner has unlimited personal liability for all business debts and obligations, whereas in a partnership, each partner is jointly and severally liable for the partnership's debts and obligations. This means that each partner can be held personally liable for the full amount of the partnership's debts, even if the debts were incurred by another partner. Therefore, D is the incorrect choice as it is not an advantage of a partnership compared to a sole proprietorship.

Which of the Following Is Not an Advantage of a Partnership