Compared to a Sole Proprietorship, Which of the Following Is

question 268

Multiple Choice

Compared to a sole proprietorship, which of the following is considered an advantage of a general partnership?

• A) Ability to pool financial resources
• B) Unlimited liability for all owners
• C) Division of profits among owners
• D) Ease and flexibility in transferring shares of ownership to others

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Definitions:

Excess Capacity

A situation where a business produces less than it is actually capable of because there is not enough demand for its product or service.

Output Contract

A legal agreement in which a seller agrees to sell all the production to a particular buyer, who in turn agrees to purchase the entire output.

Needs Contract

A contract or agreement tailored to address and fulfill specific needs of the parties involved.

Good Faith

Acting with honest intentions without seeking to take unfair advantage in a transaction or situation.