Asked by Deijah Drakeford on Jul 30, 2024
Verified
The characteristic that means if a partnership is unable to pay its obligations all general partners are individually liable is known as:
A) limited life.
B) unlimited liability.
C) limited liability.
D) mutual agreement.
Unlimited Liability
A legal structure in business where owners are personally liable for all the debts and obligations of the business.
Limited Life
A term that refers to the finite operational lifespan of an entity, asset, or agreement, after which it ceases to exist or operate.
Limited Liability
A legal structure that limits the amount of financial responsibility of the entity's owners to the amount they have invested.
- Comprehend the consequences of mutual agency and unlimited liability within partnership agreements.
Verified Answer
JD
Jagdeep DhaliwalAug 04, 2024
Final Answer :
B
Explanation :
Unlimited liability means that each general partner in a partnership is personally responsible for all the partnership's debts and obligations, without limit. This means their personal assets can be used to cover the partnership's liabilities.
Learning Objectives
- Comprehend the consequences of mutual agency and unlimited liability within partnership agreements.