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 and responsibilities of each partner, how profits and losses are shared, and what happens if a partner wants to leave the partnership.
The other statements are not accurate regarding general partnerships:
- The business does not necessarily continue if one partner dies unless there are specific provisions in place.
- Partners are personally liable for the debts of the partnership beyond their investment.
- Partnerships do not issue stock; that would apply to corporations. Partnerships may face different tax obligations but do not pay taxes on stock issuance.