Page 141 - Business Principles and Management

Unit 2

under a trade or artificial name, such as The Superior Shoe Store or W-W Manu-
facturing Company. Likewise, proper registration is usually required so that credi-
tors may know everyone who is responsible for the business. Operating under a
trade name, therefore, does not reduce the owners’ liability to creditors.

CHECKPOINT

List the types of businesses that would be a good fit for
a partnership.

5.3 Assessment

UNDERSTAND MANAGEMENT CONCEPTS
Circle the best answer for each of the following questions.
1. Advantages of partnerships include all of the following except
a. partners can pool skills and abilities
b. partners provide greater amounts of capital
c. partners have limited liability
d. the business’s credit is improved
2. Disadvantages of partnerships include all of the following except
a. partnerships may reduce competition
b. partners may disagree
c. partners are bound by contracts of others
d. partnerships have an uncertain life

THINK CRITICALLY
Answer the following questions as completely as possible.
3. Explain the advantages of being a limited partner in a company.
4. Describe the nature of businesses that are suited
to being partnerships.

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