45) What is a disadvantage of partnerships over sole proprietorships? A. In partnerships, profits have to be shared, whereas in sole proprietorships all profits belong exclusively to the owner. B. Unlike sole proprietorships, partnerships do not face any regulatory controls that affect their activities. C. In partnerships, all owners have unlimited liability, whereas in sole proprietorships they have limited liability. D. Unlike a sole proprietorship, a partnership is terminated when a partner dies or withdraws. E. In sole proprietorships, the owners have access to more funds than in partnerships.

Sole proprietorships are the most basic and simple form of a business using which one can undertake…

Answered: 45) What is a disadvantage of…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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45) What is a disadvantage of partnerships over sole proprietorships?

A. In partnerships, profits have to be shared, whereas in sole proprietorships all profits belong exclusively to the owner.
B. Unlike sole proprietorships, partnerships do not face any regulatory controls that affect their activities.
C. In partnerships, all owners have unlimited liability, whereas in sole proprietorships they have limited liability.
D. Unlike a sole proprietorship, a partnership is terminated when a partner dies or withdraws.
E. In sole proprietorships, the owners have access to more funds than in partnerships.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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