Asked by Alena Deryabina on Jun 19, 2024
Verified
Which of the following is true of a partnership?
A) Neither partner is personally liable for the debts and obligations of the business.
B) Both partners are personally liable for the debts and obligations of the business.
C) The partner who owns the larger share of the partnership is liable for the debts and obligations of the business.
D) The partner who owns the smaller share of the partnership is liable for the debts and obligations of the business.
Personally Liable
The state of being legally responsible for one's actions on an individual basis, which can result in personal financial liability.
Partnership
A form of business conduct legally established among at least two partners with shared responsibilities and profit distribution.
Debts
Money owed by one party to another under an agreement that the amount will be paid back, often with interest, by a certain date.
- Comprehend the personal liability implications for owners in different business structures.
Verified Answer
AF
Alexis FloresJun 20, 2024
Final Answer :
B
Explanation :
In a partnership, both partners are personally liable for the debts and obligations of the business. This means that if the business cannot pay its debts, creditors can go after the personal assets of both partners.
Learning Objectives
- Comprehend the personal liability implications for owners in different business structures.