Final answer:
A partnership is considered a 'legal aggregate,' where partners share liabilities, and partnership debts can become the debts of individual partners. This shared responsibility is one of the general partnership's disadvantages, despite its ease of formation and management.A
Step-by-step explanation:
A partnership is considered a legal aggregate of the partners such as when partnership debts become the debts of the individual partners. The correct option in this multiple-choice question is 'a. legal aggregate'. In a general partnership, each partner shares not only in the responsibilities and profits of the business but also in the liabilities. This includes the debts the partnership incurs, meaning that if the partnership cannot pay its debts, the creditors can seek repayment from the partners' personal assets.
General partnerships offer several advantages, such as ease of formation, shared management, and no special taxes on the business itself since each partner pays taxes on their share of the income. However, the disadvantages include personal liability for all partners, shared profits, and potential instability of the business structure if a partner leaves or passes away.
In contrast, corporations are considered to be single entities distinct from the individuals who compose them, shielding individual owners from direct legal consequences of the business's actions. Other forms of business, such as limited liability partnerships, offer some protection for personal assets by limiting partners' liability to their investment in the company.