ACCA Applied Knowledge · Business and Technology · The purpose and types of business organisation
Which of the following is a typical feature of a partnership that is NOT a limited liability partnership, compared with a limited company?
In an ordinary partnership, the partners normally have unlimited personal liability for the firm's debts. Unlike a limited company, it is not a separate legal person in the same way and ownership is not held through freely transferable shares.
- AThe partners normally have unlimited personal liability for the firm's debtsCorrect
- BThe partnership is always a separate legal entity from its partners
- COwnership is represented by freely transferable shares
Explanation
In an ordinary partnership, partners are generally personally liable for the firm's debts without limit. It is not usually a separate legal entity in the way a company is, and interests are not freely transferable shares, so the other options describe company features.
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