ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -General Partnership: Best for New Partners There is no limit to their personal liability, meaning that the partners have unlimited responsibility for company debts and legal liabilities. Similar to a sole proprietorship, the partnership doesn’t need to form a formal entity but may.

Detailed explanation-2: -Unlimited liability typically exists in general partnerships and sole proprietorships.

Detailed explanation-3: -In a limited liability company or partnership, business partners are only liable for the amount of money they have put into the company. In an unlimited liability company, the owner is inextricable from the business and is personally accountable for the company’s liabilities.

Detailed explanation-4: -A partnership is a business shared by multiple owners. It’s not a legal business entity, and it doesn’t have to be registered with the state. Basically, if you decide to go into business with another person without filing any state paperwork, you’re automatically in a partnership.