A partnership agreement defines how the partners will be compensated. Normally, ________.
A)partners are not entitled to salaries or wages, but are compensated by a share of the profits of the business
B)the general partner's salary is set at two times the salaries of the limited partners
C)both general and limited partners are permitted salaries, but all silent or dormant partners are compensated only by sharing in the profits
D)while the agreement establishes payout schedules, it does not spell out what constitutes profit

Question

Quizplus · Accepted Answer

In a partnership, the partners are typically compensated through a share of the profits of the business, rather than receiving salaries or wages. The partnership agreement will outline how this sharing of profits will occur, including any payout schedules or other relevant details. While some partnerships may allow for partner salaries or other compensation, this is not a universal feature and would need to be specifically outlined in the partnership agreement.

A Partnership Agreement Defines How the Partners Will Be Compensated