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Questions and Answers
Which of the following is NOT a characteristic of a partnership?
Which of the following is NOT a characteristic of a partnership?
- Unlimited liability
- Joint ownership
- Limited liability (correct)
- Mutual agency
What is the difference between a general partnership and a limited partnership?
What is the difference between a general partnership and a limited partnership?
- General partnerships are easier to form than limited partnerships
- General partners are liable for the partnership's debts, while limited partners are not (correct)
- Limited partnerships are taxed at a higher rate than general partnerships
- Limited partners have more control over the partnership than general partners
What is the difference between a partnership and a corporation?
What is the difference between a partnership and a corporation?
- Partnerships have limited liability, while corporations have unlimited liability
- Corporations have more flexibility in management than partnerships
- Corporations are easier to form than partnerships
- Partnerships have pass-through taxation, while corporations are taxed as separate entities (correct)
Study Notes
Characteristics of a Partnership
- Unlimited personal liability is a characteristic of a partnership, where partners are personally responsible for business debts and liabilities.
Differences between General and Limited Partnerships
- In a general partnership, all partners have unlimited personal liability and are actively involved in the business.
- In a limited partnership, there is at least one general partner with unlimited personal liability, and at least one limited partner with limited personal liability and no active role in the business.
Differences between Partnerships and Corporations
- A partnership is a voluntary arrangement between two or more individuals to carry on a business, whereas a corporation is a separate legal entity with its own rights and liabilities.
- Partnerships are taxed on the individual level, whereas corporations are taxed on the corporate level.
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Description
Test your knowledge on the fundamentals of partnership with this quiz! Learn about the characteristics of partnerships, the differences between general and limited partnerships, and how partnerships compare to corporations. This quiz is perfect for anyone looking to deepen their understanding of partnership structures.
