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Questions and Answers
What is a key characteristic of a partnership?
What is a key characteristic of a partnership?
- Limited liability for the partners
- Unlimited liability for the partners (correct)
- No sharing of profits and losses
- Exclusively for small businesses
What is a partnership?
What is a partnership?
- A business structure where two or more individuals manage and operate the business (correct)
- A business structure primarily used for large corporations
- A business structure where only one individual manages and operates the business
- A business structure where individuals are not liable for the debts of the business
How are profits and losses shared in a partnership?
How are profits and losses shared in a partnership?
- Shared based on the initial investment of each partner
- Profits are not shared, but losses are
- Only the managing partner receives profits
- Shared equally among the partners (correct)
