Question

Jamie and Maria invested all their savings in a small pizzeria they opened outside the University of Western Kentucky. They operated the business as a general partnership. After 11 months the business went broke and Jamie and Maria were left with outstanding bills of $37,500, which is more than their investment in the company. Jamie and Maria can:
Discuss
A. Lose their personal assets as the result of their company's financial problems
B. Lose only the funds they originally invested in their company
C. Lose only the total value of the assets actually used to operate the business
D. Avoid any liability for these debts since a partnership is considered to be a business entity that is separate and distinct from the partners who own it

Answer 1

Answer:

A) Lose their personal assets as the result of their company's financial problems

Explanation:

One of the main disadvantages of general partnerships is that the partners have unlimited liability for the debts and obligations of the partnership. The partnership ans the partners are not considered separate entities, therefore any remaining debt from the partnership passes to the partners.