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I was just reading across the study text of kaplan and I came across this certain question
Which of the following statements regarding types of business is correct?
A Partnerships are owned and run by one or more people
B Private limited companies can sell shares to the public
C Shareholders in companies typically have limited liability
D The owners of sole traders typically have limited liabillity
The correct answer was C
I was just wondering why A can’t be the answer
That statement seems pretty correct too
Could you please explain why that statement is wrongC is certainly correct and B and D definitely wrong.
The definition of a partnership: “the relation which subsists between persons carrying on a business in common with a view of profit.”
To my mind this would make A correct as well. However there can be ‘silent partners’ who contribute capital to the business but who take no part in running the business. That consideration would make A false, but I don’t know if that is the reason for the answer or whether the question is simply messed up.
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