Economics – Partnerships – Flashcards

A limited liability partnership, is a partnership where all partners are limited partners. True or False

Which of the following is a disadvantage of a partnership? a. potential conflicts among partners c. access to fewer resources than a sole proprietorship b. limited liability d. specialization

In which kind of business organization should you participate if you can afford to lose only the amount of your initial investment? a. dual partnership c. limited partnership b. sole proprietorship d. general partnership

If a general partnership fails, who is responsible for the debts? a. no one b. anyone who works for the partnership c. only the most senior general partner d. all of the partners

a business in which the owners share equally in both responsibility and liability

What is the difference between a general partnership and a limited liability partnership (LLP)? a. In an LLP, all partners are limited from personal liability in certain situations. b. In a general partnership, all partners are exempt from personal liability. c. In an LLP, only one partner is required to be a general partner. d. In a general partnership, only one partner has unlimited personal liability for the firm's actions.

The family-owned Italian restaurant in your neighborhood is probably an example of a a. multinational corporation. c. consumer cooperative. b. franchise. d. general partnership.

an establishment owned by two or more persons in which only one person has unlimited personal liability for the business

Why is it easier for a partnership to borrow money and to hold good employees than it is for a sole proprietorship to do so? a. The more limited access to a partner's personal funds make the business more careful. b. The large number of partners makes it more likely that the business will be a success. c. The larger number of partners means that people are easier to get along with. d. A partnership has more personal stability and access to more money.

Dr. Ruiz shares equal responsibility and liability with her colleagues in their medical practice. Her practice is a a. general partnership. c. limited liability partnership. b. limited partnership. d. sole proprietorship.