Question

Which of the following statements is true regarding a partnership contract?

a)The partnership contract must be in writing.
b)The partnership contract must be prepared by an attorney.
c)The partnership contract is not binding when the partnership experiences financial distress.
d)The partnership contract may be based on a verbal agreement.

Answer 1

A partnership contract may be based on a verbal agreement, but it is recommended to have a written contract for clarity and legal protection.

Step-by-step explanation:

A partnership contract is an agreement between two or more people who come together to start a business. Regarding the statements given:

1. The partnership contract may be based on a verbal agreement. While it is not ideal, a partnership contract can be based on a verbal agreement, although it is recommended to have a written contract for clarity and legal protection.
2. The other statements are not true. The partnership contract does not have to be prepared by an attorney, and it is not necessary for the contract to be in writing. Additionally, the partnership contract remains binding even if the partnership experiences financial distress.

Overall, a partnership contract is an important legal document that outlines the rights, responsibilities, and terms of the partnership between partners.