Compared to Corporations, What Is the Primary Disadvantage of Partnerships

question 20

Multiple Choice

Compared to corporations, what is the primary disadvantage of partnerships as forms of business organizations?

• A)The tax rates applied to partnership are higher than the tax rates applied to corporations.
• B)Any dividends paid to the owners of a partnership business are taxed twice, once at the partnership level and once at the personal, or individual level.
• C)Partnerships generally are much easier to form (start up) than corporations.
• D)Partnerships have unlimited lives whereas corporations do not.
• E)The owners of a partnership, that is, the partners, have unlimited liability when it comes to business obligations whereas the owners of a corporation have limited liability.

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Definitions:

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