True or false: there are three primary disadvantages of a regular partnership: (1) unlimited liability, (2) limited life of the organization, and (3) difficulty of transferring ownership. These combine to make it difficult for partnerships to attract large amounts of capital and thus to grow to a very large size
True
True. The three primary disadvantages of a regular partnership are unlimited liability, limited life of the organization, and difficulty of transferring ownership. Unlimited liability means that each partner is personally responsible for all debts and obligations of the partnership, even if it means they have to use their own personal assets to settle those debts. This can leave partners vulnerable to financial ruin if the partnership runs into financial trouble. The limited life of the organization refers to the fact that a partnership dissolves if one of the partners dies or leaves the partnership, which can make it difficult to establish a stable long-term organization. Finally, difficulty of transferring ownership means that it can be difficult to bring in new partners or sell the partnership, making it challenging to attract large amounts of capital and thus to grow to a very large size.
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