Which of the Following Statements Is CORRECT

question 2

Multiple Choice

Which of the following statements is CORRECT?

• A)In a regular partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business.
• B)Partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity (difficulty buying and selling) of partnership interests.
• C)A slow-growth company, with little need for new capital, would be more likely to organize as a corporation than would a faster growing company.
• D)In a limited partnership, the limited partners have voting control, while the general partner has operating control over the business.Also, the limited partners are individually responsible, on a pro rata basis, for the firm's debts in the event of bankruptcy.
• E)A major disadvantage of all partnerships relative to all corporations is the fact that federal income taxes must be paid by the partners rather than by the firm itself.

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Definitions:

Valuing Differences

The recognition and appreciation of the diverse characteristics and perspectives individuals bring to a group or organization.

Low Power Distance

A cultural value that suggests a preference for equality among individuals, minimizing hierarchical differences.

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