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Business Partnerships

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Questions and Answers

What is a major difference between a general partnership and a limited partnership?

Requirement for a formal agreement (correct)
Type of business involved
Number of partners
Level of personal liability

What is a benefit of having multiple partners in a partnership?

Increased paperwork
Reduced liability for each partner
Fewer business decisions to make
Distributed workload and combined expertise (correct)

What is a disadvantage of partnerships?

Easy to establish
Partners combining their expertise
Difficulty in transferring ownership (correct)
Distributed workload

What is a risk that partners in a partnership face?

Full personal liability for business debts (D) Signup and view all the answers

What is an advantage of forming a partnership compared to other business structures?

Easy to establish (A) Signup and view all the answers

What can be a result of disagreements between partners?

A halt in business operations (C) Signup and view all the answers

What is a key characteristic of a partnership?

It is set up between two or more individuals with similar skill sets (A) Signup and view all the answers

What is a major advantage of a corporation?

Owners are not responsible for business debts (D) Signup and view all the answers

What is a disadvantage of a C corporation?

Double taxation (C) Signup and view all the answers

Why might shareholders sell shares in a corporation?

To raise additional funds for the business (B) Signup and view all the answers

What happens to profits in a corporation before distribution to shareholders?

The corporation pays taxes on them (A) Signup and view all the answers

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