Jason and Jeanette are starting their business as a partnership along with eight other friends. They should understand that this form of business is plagued with which of the following disadvantages?

Question

Business

Alvaro Santos

25 February, 22:40

Jason and Jeanette are starting their business as a partnership along with eight other friends. They should understand that this form of business is plagued with which of the following disadvantages?

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Answers (1)

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Adyson Brown · Answer 1

Unlimited Liability

Explanation:

Jason, Jeanette, and their eight other friends are forming an unlimited liability corporation, which exist in a few Canadian provinces (Alberta, Nova Scotia, and British Columbia).

In unlimited liablity corporations, as the name implies, partners have unlimited liability in case of bankruptcy or default. This means that if the company fails, partners do not only provide their capital contributions, but also their personal wealth. (for example, their houses, cars, appliances, etc).