Answered: Which one of the following statements…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which one of the following statements is true regarding a partner's personal liability for partnership debts?

In a limited partnership, all partners have limited liability for partnership debts

In a general partnership, all partners are liable for entity debts.

In a limited liability partnership, a partner might be subject to liability for other partners' malpractice.

LLC members can never be liable for entity debts.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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