A partnership:
A)is a taxpaying entity.
B)is not a distinct entity, separate from its owners for accounting purposes.
C)has mutual agency.
D)has limited liability for the partners.

Question

Quizplus · Accepted Answer

A partnership is a type of business structure where two or more individuals own and operate the business together. One of the key characteristics of a partnership is mutual agency, which means that each partner has the power to bind the partnership in business dealings with others. This means that all partners are responsible for the actions of their fellow partners. However, partnerships do not have limited liability for the partners, which means that the personal assets of each partner may be at risk if the partnership runs into financial trouble. Additionally, partnerships are not taxpaying entities, as the profits and losses of the partnership flow through to the individual partners and are reflected on their personal tax returns.

A Partnership