Disadvantages of a partnership include
A)Facilitates pooling of resources.
B)No corporate tax burden.
C)Mutual agency.
D)Freedom and flexibility for partners.

Question

Quizplus · Accepted Answer

Mutual agency is a disadvantage of a partnership because it means that each partner is legally responsible for the actions of the other partners. This means that if one partner makes a mistake or incurs a liability, all partners are personally responsible. This can put personal assets at risk and potentially harm the financial stability of the business. While the other options listed as advantages of a partnership, they do not pertain to the question asking for disadvantages of a partnership.

Disadvantages of a Partnership Include