Which statement is TRUE about partnerships?
A)A partnership is a taxpaying entity.
B)General partnerships have mutual agency and limited liability.
C)Individuals,corporations,partnerships,or other types of entities can be partners.
D)A written partnership contract must exist.

Question

Quizplus · Accepted Answer

Partnerships can be formed by individuals, corporations, partnerships, or other types of entities. A, B, and D are false statements. A partnership is a pass-through entity for tax purposes, meaning that the profits and losses flow through to the individual partners to report on their personal tax returns. General partnerships have mutual agency and unlimited liability, while limited partnerships have limited liability for some partners. A written partnership contract is not required, but it is highly recommended to avoid misunderstandings and disputes.

Which Statement Is TRUE About Partnerships