Question 28
Business OrganisationsThe most important limitation on the partnership as a form of business enterprise is the
- A.implication for partners' liability
- B.legal limitation placed on the number of partners
- C.difficulties arising from having two co-ordinate heads of a firm
- D.fact that each partner regardless of the capital he contributes, must have the same voting rights.
Show the answer and explanation
Answer: A (implication for partners' liability)
Explanation
In an ordinary partnership each partner has unlimited liability: his private property can be taken to pay the firm's debts. This risk is the main limitation of the partnership form.