In comparison to a company, a disadvantage of operating as a partnership is:
A)unlimited liability.
B)limited life.
C)mutual agency.
D)all of the above.

Question

Quizplus · Accepted Answer

Partnerships have a few disadvantages in comparison to companies, including unlimited liability, limited life, and mutual agency. Unlimited liability means that partners are personally responsible for the debts and obligations of the partnership, which can put their personal assets at risk if the partnership runs into financial trouble. Limited life refers to the fact that partnerships typically come to an end when one of the partners dies or decides to leave, which can create uncertainty for the business. Mutual agency means that each partner has the power to bind the partnership to contracts and other legal obligations, which can create liability and legal issues if one partner acts without the consent of the others.

In Comparison to a Company, a Disadvantage of Operating as a Partnership