Which of the Following Is a True Statement About the Characteristics

question 20

Multiple Choice

Which of the following is a true statement about the characteristics of partnerships?

• A) In a limited-liability partnership, a wayward partner can create a large liability for the other partners.
• B) General partners have mutual agency and limited liability.
• C) Income and loss of the partnership "flows through" to the partners.
• D) The partnership agreement must be in writing.

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Definitions:

Illusory Contract

An agreement that fails to bind one party due to vague or unenforceable terms, making it appear to be a contract only in illusion.

Probated

Referring to the legal process in which a will is reviewed to determine whether it is valid and authentic.

Option Contract

A contract that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price within a specified period.

Legal Detriment

A loss or disadvantage that one party agrees to suffer upon entering into a contract, which serves as consideration for the contract.