Asked by Brooklyn Roller on May 16, 2024
Verified
Which of the following is NOT an advantage of a partnership?
A) Partners' income taxes may be less than the income taxes would be on a corporation.
B) Each partner has limited liability.
C) It is possible to bring together more managerial skills than in a sole proprietorship.
D) It is possible to bring together more capital than in a sole proprietorship.
Limited Liability
A legal status where a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership.
Income Taxes
Taxes imposed by the government on the income earned by individuals and businesses over a fiscal period.
Managerial Skills
Managerial Skills involve the abilities and knowledge that enable an individual to manage people, resources, and processes effectively in achieving organizational goals.
- Acquire knowledge on how general partnerships are formed and their defining features, emphasizing the minimal formal procedures involved in their creation.
- Discern between divergent types of partners, elucidating their related rights, duties, and liabilities in a partnership setting.
Verified Answer
KW
Kellin Wong Kai XinMay 16, 2024
Final Answer :
B
Explanation :
One disadvantage of a partnership is that each partner has unlimited personal liability for the partnership's debts and obligations. Therefore, option B, which states that each partner has limited liability, is not an advantage of a partnership. Options A, C, and D are advantages of a partnership.
Learning Objectives
- Acquire knowledge on how general partnerships are formed and their defining features, emphasizing the minimal formal procedures involved in their creation.
- Discern between divergent types of partners, elucidating their related rights, duties, and liabilities in a partnership setting.