Question

a disadvantage of forming a partnership is that owners
can find it tougher to start and stop a business.
can find it more difficult to get a bank loan.
are only responsible for their own finances.
are fully responsible for their partners losses.

Explanation:

To solve this, we analyze each option based on partnership characteristics:

• Option 1: Partnerships are relatively easy to start/stop compared to corporations, so this is incorrect.
• Option 2: Partnerships often have an easier time getting loans (more owners, more assets), so this is incorrect.
• Option 3: In a partnership, owners (partners) have joint liability, not just their own finances, so this is incorrect.
• Option 4: In a general partnership, each partner is fully liable for the debts and losses of the partnership, including those caused by other partners. This is a key disadvantage of partnerships.

Answer:

D. are fully responsible for their partners’ losses