When comparing partnerships to sole proprietorships,an advantage of partnerships is that they:
A)limited liability for the general partner.
B)are easier to terminate.
C)cost less to organize.
D)give the firm a stronger financial foundation.

Question

Quizplus · Accepted Answer

Partnerships generally have more financial resources as multiple partners contribute capital and share profits and losses. This provides a stronger financial foundation compared to sole proprietorships, where the owner is solely responsible for financing the business. Therefore, D is the correct answer. Limited liability for the general partner is a benefit of a limited partnership, not a partnership in general (A is incorrect). Partnerships can be difficult to terminate due to the shared ownership and decision-making involved (B is incorrect). Partnerships may actually cost more to organize due to legal and accounting fees associated with drafting a partnership agreement (C is incorrect).

When Comparing Partnerships to Sole Proprietorships,an Advantage of Partnerships Is