What advantage is offered by a general partnership, as compared to a corporation, as a form of business organization?
A)Partners may be able to reduce their personal income taxes if the business has losses in the start-up years.
B)Higher salaries can be paid to family members and claimed as an expense.
C)Creditors cannot seize a partner's personal assets to cover business obligations.
D)Partners will be able to defer taxes on income that is left within the partnership.

Question

Quizplus · Accepted Answer

A general partnership offers the advantage of passing through losses to partners, who may be able to reduce their personal income taxes if the business has losses in the start-up years. This is not an advantage offered by a corporation, which is a separate legal entity with its own tax obligations.

What Advantage Is Offered by a General Partnership, as Compared