Question

A disadvantage of forming a partnership is that ownersa) can find it tougher to start and stop a business.b) can find it more difficult to get a bank loan.c) are only responsible for their own finances.d) are fully responsible for their partners' losses.

Answer 1

Answer : option D

Explanation : In simple words, partnership refers to the business arrangement in which two or more individuals join their resources and effort for attaining mutual objectives.

In such arrangements, firms and owners are not considered to be separate legal entities, thus owners are personally liable for the firms debts, thus if a loss occurs due to one partner the other partner has to bear its losses as well.

These firms can easily obtain bank loans as banks can take back their money in case of default form personal assets of owners. These businesses generally operate at the medium level therefore the entry and exit from the market is comparatively easy.  

Answer 2

Answer:

D. Are fully responsible for their partners losses

Explanation:

The formal agreement between two or more parties for managing, operating and sharing the profits in a business is called partnership business. there are various types of business partnerships. In some partnerships   all the partners share the profits and liabilities equally while in others they are have limited liability.  

Generally there are three types of business partnerships: General partnership, Limited Liability Partnership,Limited Partnership.

There are no liability protection in the general liability partnership because owners personal assets are also considered as business assets. Although they are easiest to create but they also have the highest risk for the partners.