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Which is not an advantage of a partnership

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Reference no: EM132830722

Problem 1: Which of the following is NOT an advantage of a partnership?

a. It is possible to bring together more managerial skills than in a sole proprietorship.
b. It is possible to bring together more capital than in a sole proprietorship.
c. Partners' income taxes may be less than the income taxes would be on a corporation.
d. Each partner has limited liability.

Problem 2: Jack is admitted to the partnership of Peterson & Smith and makes an initial capital contribution of $15,000. Two years later, when liabilities of the partnership exceed its assets by $20,000, the firm is dissolved. Peter had loaned the firm $5,000 six months before Jack was admitted; Rick had loaned the firm $8,000 three months after Jack was admitted. Jack has:

a. no liability to Peter.
b. no liability to Rick.
c. liability to Peter to the extent of his capital contribution and is personally liable to Rick.
d. liability to Peter and Rick only to the extent of his capital contribution.

Reference no: EM132830722

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