Question

Different forms of businesses have different characteristics. Which of the following characteristics would apply to a partnership? Check all that apply.

a. Income is allocated on a pro rata basis
b. Legal arrangement between two or more people
c. Can easily raise large amounts of capital
d. Chartered by a state and is its own legal entity separate and distinct from its owners and managers
e. Taxed at individual level
f. Subject to unlimited personal liability

Answer 1

A partnership is a legal arrangement between two or more people working together in owning their business. Income is allocated on a pro rata basis and partners are subject to unlimited personal liability.

Step-by-step explanation:

A partnership is a legal arrangement between two or more people working together in owning their business. One of the characteristics of a partnership is that income is allocated on a pro rata basis, meaning the profits and losses are divided among the partners based on their ownership percentage. Another characteristic is subject to unlimited personal liability, which means the partners are personally responsible for the debts and obligations of the partnership.