Final answer:
Among the provided statements, 'a partnership has limited liability' is not universally true; only in a limited liability partnership (LLP) do partners enjoy limited liability. In a general partnership, partners share unlimited personal liability for the business's debts, which differs significantly from an LLP. The correct option is a.
Step-by-step explanation:
The question deals with identifying the incorrect statement regarding partnerships out of the provided options. The correct answer is that the statement "a partnership has limited liability" is not true for all partnerships.
In a general partnership, each partner has unlimited personal liability for the debts and obligations of the business, meaning they can lose personal assets if the business fails.
However, there is a form of partnership known as a limited liability partnership (LLP) where the liability of the partners is limited to their investment in the company.
Partnerships are similar to sole proprietorships in that they are easy to start and manage, have limited life, and don't require pay taxes as separate entities since each partner pays taxes on their share of the income.
Partnerships can attract investors more easily than sole proprietorships due to a pooling of resources, but they must contend with shared responsibility for each partner's actions, which can lead to personal liability. The correct option is a.