Question

Which of the following is a disadvantage of a partnership when compared to a corporation? a.The partnership is more likely to have a net loss. b.The partnership is easier to organize. c.The partnership is less expensive to organize. d.The partnership has unlimited liability.

Answer 1

Answer:

d. The partnership has unlimited liability.

Explanation:

In a partnership, there is an agreement between two or more persons who come together to contribute their assets. In this, the profits and losses are shared between the partners in their profit-losses ratio.  

Whereas a corporation is a group of people who represents as a single entity

The partnership is easier to organize plus it is less expensive too, and we cannot say that the firm is earning profit or suffering any losses but the liability of the partners are limited