The type of partnership characterized by the limited liability of all partners is a limited liability partnership.
What type of partnership is characterized by the limited liability of all partners?(1 point)
Responses
general partnership
general partnership
limited partnership
limited partnership
limited liability partnership
limited liability partnership
sole partnership
9 answers
Riley and Layla are interested in forming a partnership but are concerned about the associated taxes. If the partnership agreement is set such that 80% of earnings go to Riley and 20% go to Layla, which of the following correctly describes how taxes will be paid on the earnings?(1 point)
Responses
The partnership itself will pay the tax on total earnings before the earnings are distributed to Riley and Layla.
The partnership itself will pay the tax on total earnings before the earnings are distributed to Riley and Layla.
Riley and Layla will each pay personal income tax on the portion of earnings that is theirs.
Riley and Layla will each pay personal income tax on the portion of earnings that is theirs.
Riley and Layla will each pay personal income tax on half of the partnership's total earnings regardless of how the earnings are distributed.
Riley and Layla will each pay personal income tax on half of the partnership's total earnings regardless of how the earnings are distributed.
The partnership itself will pay the tax on each portion of earnings after they have been distributed to Riley and Layla.
Responses
The partnership itself will pay the tax on total earnings before the earnings are distributed to Riley and Layla.
The partnership itself will pay the tax on total earnings before the earnings are distributed to Riley and Layla.
Riley and Layla will each pay personal income tax on the portion of earnings that is theirs.
Riley and Layla will each pay personal income tax on the portion of earnings that is theirs.
Riley and Layla will each pay personal income tax on half of the partnership's total earnings regardless of how the earnings are distributed.
Riley and Layla will each pay personal income tax on half of the partnership's total earnings regardless of how the earnings are distributed.
The partnership itself will pay the tax on each portion of earnings after they have been distributed to Riley and Layla.
The correct description of how taxes will be paid on the earnings in this partnership scenario is: Riley and Layla will each pay personal income tax on the portion of earnings that is theirs.
In a partnership, the earnings are typically passed through to the partners, and each partner is responsible for paying taxes on their share of the earnings.
Jonah and Jaycee are partners. Which of the following illustrates the concept of mutual agency?(1 point)
Responses
Two partners are equally liable for damages that occurred while conducting business.
Two partners are equally liable for damages that occurred while conducting business.
Jaycee must have permission from Jonah before engaging in any business transactions.
Jaycee must have permission from Jonah before engaging in any business transactions.
Neither partner is liable for damages that occurred while conducting business.
Neither partner is liable for damages that occurred while conducting business.
Jonah signs a purchase agreement with a supplier while Jaycee agrees to hire a marketing firm to drum up business.
Jonah signs a purchase agreement with a supplier while Jaycee agrees to hire a marketing firm to drum up business.
Responses
Two partners are equally liable for damages that occurred while conducting business.
Two partners are equally liable for damages that occurred while conducting business.
Jaycee must have permission from Jonah before engaging in any business transactions.
Jaycee must have permission from Jonah before engaging in any business transactions.
Neither partner is liable for damages that occurred while conducting business.
Neither partner is liable for damages that occurred while conducting business.
Jonah signs a purchase agreement with a supplier while Jaycee agrees to hire a marketing firm to drum up business.
Jonah signs a purchase agreement with a supplier while Jaycee agrees to hire a marketing firm to drum up business.
The option that illustrates the concept of mutual agency is: Jonah signs a purchase agreement with a supplier while Jaycee agrees to hire a marketing firm to drum up business.
Mutual agency means that each partner has the authority to act on behalf of the partnership and bind the partnership in business transactions, which is reflected in both partners engaging in separate business dealings for the partnership.
Jonathan owns and operates a successful sole proprietorship. A friend, who owns a similar business, suggests that they combine their businesses and form a new partnership. Which of the following should Jonathan consider before making a decision?(1 point)
Responses
When Jonathan and his friend pool their resources, they will each gain some control over the decision-making process; however, the new business will likely grow slower than the sole proprietorship.
When Jonathan and his friend pool their resources, they will each gain some control over the decision-making process; however, the new business will likely grow slower than the sole proprietorship.
When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
Jonathan will gain more control over decision-making by partnering with his friend; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
Jonathan will gain more control over decision-making by partnering with his friend; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, Jonathan will lose some of the control over decision-making that he currently enjoys.
Responses
When Jonathan and his friend pool their resources, they will each gain some control over the decision-making process; however, the new business will likely grow slower than the sole proprietorship.
When Jonathan and his friend pool their resources, they will each gain some control over the decision-making process; however, the new business will likely grow slower than the sole proprietorship.
When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
Jonathan will gain more control over decision-making by partnering with his friend; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
Jonathan will gain more control over decision-making by partnering with his friend; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, Jonathan will lose some of the control over decision-making that he currently enjoys.
The option that Jonathan should consider before making a decision is: When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, Jonathan will lose some of the control over decision-making that he currently enjoys.
Partnering with a friend and pooling resources can lead to increased growth potential, but it also involves sharing control, which is a significant change from operating as a sole proprietor.
In a general partnership,(1 point)
Responses
partners usually draw up legal papers called articles of partnership.
partners usually draw up legal papers called articles of partnership.
the business continues even if one partner dies.
the business continues even if one partner dies.
partners must pay business taxes on stock they issue.
partners must pay business taxes on stock they issue.
partners are only liable for the business's debt up to the amount of their investment.
Responses
partners usually draw up legal papers called articles of partnership.
partners usually draw up legal papers called articles of partnership.
the business continues even if one partner dies.
the business continues even if one partner dies.
partners must pay business taxes on stock they issue.
partners must pay business taxes on stock they issue.
partners are only liable for the business's debt up to the amount of their investment.
In a general partnership, the correct statement is: partners usually draw up legal papers called articles of partnership.
This document outlines the terms of the partnership, including the responsibilities of each partner, profit-sharing arrangements, and other essential governance aspects. The other statements listed are not accurate representations of how a general partnership operates. For instance, a general partnership typically dissolves if one partner dies.