Which of the following is a characteristic of general partnership?
A. One person is the owner of a general partnership
B. Each partner has different rights when representing the partnership
C. The partnership has limited life
D. The partners have limited liability
B. Each partner has different rights when representing the partnership
The correct answer is B. Each partner has different rights when representing the partnership.
To determine the correct answer, let's analyze each option:
A. One person is the owner of a general partnership: This statement is incorrect. A general partnership is a business structure where two or more people agree to share the profits and losses of a business. The ownership and responsibility are shared among the partners.
B. Each partner has different rights when representing the partnership: This statement is also incorrect. In a general partnership, all partners generally have equal rights and authority to represent the partnership. The decisions and actions of one partner are binding on all partners.
C. The partnership has limited life: This statement is partially correct. A general partnership does not have a limited life. Unlike some other business structures, such as corporations, a general partnership does not cease to exist if one partner leaves or dies. The partnership can continue as long as there is at least one remaining partner.
D. The partners have limited liability: This statement is also incorrect. In a general partnership, the partners have unlimited personal liability. This means that each partner is personally responsible for the partnership's debts and obligations. In the event of a lawsuit or financial loss, the partners' personal assets can be at risk.
Based on the analysis, the correct characteristic of a general partnership is:
C. The partnership has limited life