A Disadvantage of a General Partnership, Compared to a Regular

question 28

Multiple Choice

A disadvantage of a general partnership, compared to a regular corporation, is that:

• A) There are more formalities and costs in establishing partnerships.
• B) Partnership income is subject to double taxation.
• C) Partners are subject to unlimited liability for debts of the business.
• D) Partnerships must obtain charters from the state they are established in.

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Definitions:

Total Product

The aggregate amount of goods or services generated by a business given a specific amount of resources.

Diminishing Rate

A principle stating that if one factor of production is increased while others are held constant, the incremental gains in output will eventually decrease.

Long Run

Refers to a period in economics where all factors of production can be adjusted, and all costs are variable, allowing for complete industry adjustment.

Renovate

The process of restoring or improving a building, room, or structure to make it more attractive, functional, or to bring it up to current standards.