Which of the Following Is a Disadvantage of Partnership Firms

question 167

Multiple Choice

Which of the following is a disadvantage of partnership firms?

• A) They cannot be dissolved without the permission of the SEC.
• B) They are taxed at multiple levels: corporate level and individual level.
• C) They have more difficulty in raising capital as compared to a sole proprietorship.
• D) They have mutual agency which creates personal obligations for each partner.

Understand the benefits principle of taxation and its application.

Comprehend the concept of marginal vs. average tax rates.

Analyze the implications of using specific taxes for public finance.

Understand the theory of tax incidence known as the flypaper theory.

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