Which of the following is a disadvantage of a general partnership?

Prepare for the Arkansas NASCLA Contractors Exam. Use flashcards and multiple choice questions, each with hints and explanations, to master your exam material.

In a general partnership, one of the key characteristics is that all partners share the responsibilities and the management of the business. However, this arrangement can create challenges when it comes to making changes to the partnership structure, particularly in bringing in new partners or removing existing ones. Such changes often require consensus among all partners, which can lead to disagreements or complications. This possible difficulty in changing partners can hinder the flexibility and adaptability of the business.

Options such as "No personal liability," "Unlimited life of business," and "Direct control by a single partner" do not accurately reflect disadvantages of general partnerships. In fact, general partners face unlimited personal liability for the debts of the partnership, which is a significant risk. The partnership typically does not have an unlimited life unless specifically outlined in an agreement, as it can dissolve with changes in the partnership. Direct control by a single partner may not apply in a general partnership, as decisions are typically made collectively unless otherwise specified.

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