(True/False) The disadvantages associated with a proprietorship are similar to those under a partnership. One exception...

(True/False) The disadvantages associated with a proprietorship are similar to those under a partnership. One exception relates to the more formal nature of the partnership agreement and the commitment of all partners' personal assets. As a result, partnerships do not have difficulty raising large amounts of capital.

Expert Solution

Answer : FALSE

A sole proprietorship is owned , managed and business operations are run by one individual who receives all profits and has unlimited liability for all losses and debts.

A partnership firm is an agreement between people who have agreed to share profits of a business carried on by all or any of them on behalf of all of them.

Raising Capital for the firm is equally difficult for partnerships and sole proprietorship. In soleproperietorship , there is unlimited liability on behalf of owner and he is fully commited as the partners are in partnership.

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