Asked by samuel goetz on Apr 28, 2024
Verified
A partnership is based on a(n) __________ contract between two or more competent persons who agree to place some or all of their money or other assets, labor, and skill in a business, with the understanding that profits and losses will be proportionately shared.
A) involuntary
B) voluntary
C) notarized
D) mandated
Voluntary Contract
An agreement entered into freely by two or more parties, where each party has the ability to accept or reject the terms of the agreement.
Competent Persons
Individuals who have the necessary ability, knowledge, or qualifications to perform a specific task or duty effectively.
Proportionately Shared
Equitably distributed or allocated among participants according to their respective shares, responsibilities, or contributions.
- Comprehend the fundamental definitions and features of various business entities such as sole proprietorships, partnerships, and corporations.
- Identify the significance and techniques of distributing profits and mitigating losses within partnerships.
Verified Answer
LP
Layna PasiukMay 01, 2024
Final Answer :
B
Explanation :
A partnership is based on a voluntary agreement between individuals to share resources and responsibilities in a business, with an understanding of shared profits and losses.
Learning Objectives
- Comprehend the fundamental definitions and features of various business entities such as sole proprietorships, partnerships, and corporations.
- Identify the significance and techniques of distributing profits and mitigating losses within partnerships.