Which of the following is a characteristic of general partnerships?
The partners have limited liability.
The partnership has limited life.
Each partner has different rights when representing the partnership.
One person is the owner of a general partnership.
Each partner has different rights when representing the partnership.
The correct characteristic of general partnerships among the given options is: Each partner has different rights when representing the partnership.
The characteristic of general partnerships among the options given is: Each partner has different rights when representing the partnership.
To determine the correct answer, let's break down each option:
1. The partners have limited liability: This statement is not a characteristic of general partnerships. In a general partnership, the partners have unlimited liability, meaning they are personally responsible for the debts and obligations of the partnership.
2. The partnership has limited life: This statement is not a characteristic of general partnerships either. General partnerships, unlike corporations, do not have a limited existence. A general partnership can continue as long as the partners wish to operate it.
3. Each partner has different rights when representing the partnership: This statement is indeed a characteristic of general partnerships. In a general partnership, each partner has the authority to bind the partnership and make decisions on its behalf, usually with respect to ordinary business matters. However, the specific rights and scope of authority may vary between partners and can be predetermined in the partnership agreement.
4. One person is the owner of a general partnership: This statement is incorrect. A general partnership is a business structure formed by two or more individuals (partners) who share in the profits, losses, and management of the partnership. No single person owns the partnership; it is collectively owned by the partners.
Therefore, the correct characteristic of general partnerships among the options provided is: Each partner has different rights when representing the partnership.