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Questions and Answers
What is a key characteristic of a partnership firm?
What is a key characteristic of a partnership firm?
- Unlimited liability (correct)
- Separate legal entity
- Issuance of shares
- Limited liability
What is the taxation status of a partnership firm?
What is the taxation status of a partnership firm?
- It is taxed at the corporate tax rate
- It is taxed as a separate legal entity
- It is not subject to tax
- It passes through its profits or losses to the partners for taxation (correct)
How are profits and losses typically shared in a partnership firm?
How are profits and losses typically shared in a partnership firm?
- In proportion to the capital invested by each partner (correct)
- According to the seniority of the partners
- Equally among the partners
- Based on the number of partners only
