In a general partnership, the correct response is:
partners usually draw up legal papers called articles of partnership.
This document outlines the terms and conditions of the partnership, including the roles, responsibilities, and distribution of profits among partners.
However, it's also important to note the other statements:
- In a general partnership, partners are personally liable for the business's debts, which means they can be held accountable beyond their initial investments.
- The partnership does not automatically continue if one partner dies; it often dissolves unless there are specific provisions in the partnership agreement.
- Partners in a general partnership do not issue stock; they typically report business income on their personal tax returns instead.
If you have more questions or need further clarifications, feel free to ask!
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