Which One of the Following Is a Disadvantage of a Partnership

question 151

Multiple Choice

Which one of the following is a disadvantage of a partnership?

• A) Double taxation.
• B) Ability to raise capital as compared to a sole proprietorship.
• C) Growth limitations due to the inability to raise investment capital.
• D) The debt obligations of a limited partner.
• E) Complexity and cost of partnership formation.

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Definitions:

Sole Proprietorships

A business structure where a single individual owns and runs the business, responsible for all its debts and liabilities.

Partnerships

A business structure where two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.

Small Business

A privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business.

Partnerships

A business structure where two or more individuals manage and operate a business in accordance with terms set out in a Partnership Agreement.