6.3 Partnerships Quiz

What is the primary purpose of a partnership?

• To travel the world

• To make friends

• To have fun

• To make money

What is a key characteristic of a partnership in terms of liability?

• Partners are liable for taxes only

• Partners are personally liable for debts

• Partners are only liable for profits

• Partners have no liability

What is the benefit of forming a partnership in comparison to a company?

• More expensive to form

• Simpler and less expensive to form

• Less control over decision-making

• Limited liability for partners

What is a key factor to consider before entering a partnership?

• Number of employees

• Trust and communication

• Office location

• Marketing strategy

What is the purpose of a partnership agreement?

• To restrict profits

• To limit communication

• To outline roles and responsibilities

• To dissolve the partnership

What type of partner actively participates in managing and running the business?

• General Partners

• Dormant/Sleeping Partners

• Salaried Partners

• Partners by Estoppel

Which type of partner receives a fixed salary for their work in the partnership?

• Salaried Partners

• General Partners

• Dormant/Sleeping Partners

• Partners by Estoppel

What is the liability of a dormant partner in a partnership?

• Fully liable for debts

• Limited liability

• Liability for profits only

• No liability

What type of partner can be held liable like one due to their actions or inaction?

• Salaried Partners

• Dormant/Sleeping Partners

• Partners by Estoppel

• General Partners

What is the purpose of a well-drafted partnership agreement?

• To confuse partners

• To define roles and responsibilities

• To limit profits

• To avoid communication