INTRODUCTION TO ENTREPRENEURSHIP
ENTREPRENEURIAL PROCESS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In partnership, liability is ____ and ____ partner can be held liable for the business’ entire debt
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limited; each
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limited; neither
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unlimited; each
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unlimited; neither
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Explanation:
Detailed explanation-1: -A partner has unlimited personal liability for any and all debts and obligations of the company. Each partner reports their share of business profits and losses on their individual tax return and pays any taxes due.
Detailed explanation-2: -Liability of partners shall be limited except in case of unauthorized acts, fraud and negligence. But a partner shall not be personally liable for the wrongful acts or omission of any other partner.
Detailed explanation-3: -In a general partnership, each partner has unlimited personal liability. Partnership rules usually dictate that whatever debts are incurred by the business, it is the legal responsibility of all partners to pay them off.
There is 1 question to complete.