The liability of partners in an ordinary partnership is generally:
Correct answer: C. Unlimited and usually joint with other partners
- A. Limited to the value of company shares
- B. Limited to the partner's initial investment
- C. Unlimited and usually joint with other partners
- D. Transferred entirely to the government
Explanation
In an ordinary partnership, partners may be personally liable for the firm's debts, and each partner can bind the firm in the ordinary course of business. Limited liability requires a different legal form or arrangement.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Nature and Forms of Business Organisation
Business organisation combines people, capital, materials and entrepreneurship to produce goods or services and earn profit, while also meeting customer and social needs. Coverage includes sole proprietorships, partnerships, companies and cooperatives, with comparisons of ownership, liability, control, profit sharing, continuity and legal status.
Practise Nature and Forms of Business Organisation
30 free Nature and Forms of Business Organisation MCQs from Introduction to Business, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Introduction to Business questions like this
Introduction to Business is on this paper prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for it.
More Nature and Forms of Business Organisation questions
Which form of business organisation normally provides limited liability to its shareholders?
What is the main legal advantage of forming a company rather than operating as a sole proprietorship?
In a partnership, the relationship among partners is primarily created by:
Which characteristic is most closely associated with a cooperative society?
What does perpetual succession mean in relation to a company?
Which form of organisation is usually most suitable for a very small business owned and managed by one person?