Final answer:
The statement that a partnership has a limited life due to partner relationship changes is true, as partners' departures, additions, or deaths lead to the dissolution and formation of a new entity, though the business might continue under the same name.
Step-by-step explanation:
The assertion that a partnership has a limited life due to changes in partnership relationships is true. A partnership is indeed limited in duration and is dissolved whenever there is a change in the relationship of partners, such as when a partner leaves, passes away, or is otherwise replaced. In general, the structure of a partnership, which involves shared responsibility and liability, means that partners are held accountable for each other's actions, including the debts they incur. This can lead to personal liabilities for the partners and can affect their personal assets in case of bankruptcy or legal issues.
Adding new partners or the departure of existing ones necessitates the formation of a new legal entity, which changes the business dynamics. While the enterprise might maintain the same name, its legal standing and operations may vary. Therefore, even though the operations and branding of a business may continue, the original partnership agreement is considered to have ended. It's important to distinguish this from a limited liability partnership, where the partners' liabilities are generally limited to their investment and do not extend to personal assets.