Which of the Following Statements Is CORRECT

question 37

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) Attracting large amounts of capital is more difficult for partnerships than for 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) The limited partners in a limited partnership 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 compared 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:

Infraction

A violation or infringement of a rule, agreement, or law.

Effective Group Standards

Norms and expectations established by a group that guide the behavior and performance of its members.

Organizational Reputation

The public perception of a company or institution, influenced by its actions, policies, and achievements.

Electronic Communication

The transmission of information using electronic systems or devices such as email, social media, or text messaging.