In a partnership, what is the main disadvantage compared to a corporation?

₹0.0

Question: In a partnership, what is the main disadvantage compared to a corporation?

Options:

Correct Answer: Limited lifespan

Solution:

Partnerships typically have a limited lifespan, as they can dissolve upon the departure of a partner.

In a partnership, what is the main disadvantage compared to a corporation?

In a partnership, what is the main disadvantage compared to a corporation?

Step 1: Understand what a partnership is. A partnership is a business structure where two or more people share ownership and responsibilities.
Step 2: Know what a corporation is. A corporation is a separate legal entity that can own property, enter contracts, and is distinct from its owners.
Step 3: Identify the lifespan of a partnership. Partnerships can end if one partner leaves, dies, or decides to quit.
Step 4: Compare this to a corporation. Corporations can continue to exist even if owners change or leave, as they are separate from the individuals.
Step 5: Conclude that the main disadvantage of a partnership is its limited lifespan compared to a corporation.

Partnership vs. Corporation – Partnerships are often less stable than corporations due to their reliance on the individual partners, which can lead to dissolution if a partner leaves.
Limited Lifespan – Partnerships may have a limited lifespan compared to corporations, which can exist indefinitely regardless of changes in ownership.