Which of the following statements is CORRECT?
A) Corporations are at a disadvantage relative to partnerships because they have to file more reports to state and federal agencies, including the Securities and Exchange Administration, even if they
Are not publicly owned.
B) In a regular partnership, liability for the firm's debts is limited
To the amount a particular partner has invested in the business.
C) A fast-growth company would be more likely to set up as a partnership for its business organization than would a slow-growth
Company.
D) Partnerships have difficulty attracting capital in part because of their unlimited liability, the lack of impermanence of the
Organization, and difficulty in transferring ownership.
E) A major disadvantage of a partnership relative to a corporation as a form of business organization is the high cost and practical
Difficulty of its formation.

Question

Quizplus · Accepted Answer

Partnerships have unlimited liability, which means that partners are personally responsible for the debts of the business. This makes it difficult for partnerships to attract capital, as investors may be hesitant to invest in a business where they could potentially be held responsible for the company's debts. Additionally, partnerships typically have difficulty in transferring ownership or achieving impermanence of the organization.

Which of the Following Statements Is CORRECT