A) The owners and the business are separate legal entities.
B) Each partner is potentially responsible for the debts of the business.
C) Formation of a partnership requires getting a charter from the state of incorporation.
D) A partnership is not considered to be a separate accounting entity.
Answer: B
Explanation: Legally, each partner in a general partnership is responsible for the debts of the
business. In this case, each general partner has unlimited liability.
For a business organized as a general partnership, which statement is true?
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