In what way does a partnership typically last longer than a sole proprietorship?

In what way does a partnership typically last longer than a sole proprietorship?

• A. By having unlimited liability
• B. By combining individual resources
• C. By avoiding special taxes
• D. By sharing decision-making

Answer: (B)

A partnership typically lasts longer than a sole proprietorship by combining individual resources. This structure allows partners to pool their assets, expertise, and capital, which can enhance the stability and sustainability of the business. Because multiple individuals are working together, a partnership can draw on a broader range of skills and resources, making it more resilient in the face of challenges. In contrast, a sole proprietorship is dependent on one individual. If that individual decides to leave the business or is unable to continue for any reason, the business often ceases to exist. The collective resources and shared responsibilities in a partnership contribute to a continuity that is generally absent in a sole proprietorship. The other options, while they may apply to some extent in a business context, do not accurately capture how partnerships and sole proprietorships differ in terms of longevity. Unlimited liability can actually pose a risk for both structures. Avoiding special taxes is not a defining factor for the longevity of the business model. Sharing decision-making is indeed a feature of partnerships, but it does not directly relate to the duration of existence in the same way that the combination of resources does. Combining individual resources fundamentally enhances the partnership's capability to thrive over time.

A partnership typically lasts longer than a sole proprietorship by combining individual resources. This structure allows partners to pool their assets, expertise, and capital, which can enhance the stability and sustainability of the business. Because multiple individuals are working together, a partnership can draw on a broader range of skills and resources, making it more resilient in the face of challenges.

In contrast, a sole proprietorship is dependent on one individual. If that individual decides to leave the business or is unable to continue for any reason, the business often ceases to exist. The collective resources and shared responsibilities in a partnership contribute to a continuity that is generally absent in a sole proprietorship.

The other options, while they may apply to some extent in a business context, do not accurately capture how partnerships and sole proprietorships differ in terms of longevity. Unlimited liability can actually pose a risk for both structures. Avoiding special taxes is not a defining factor for the longevity of the business model. Sharing decision-making is indeed a feature of partnerships, but it does not directly relate to the duration of existence in the same way that the combination of resources does. Combining individual resources fundamentally enhances the partnership's capability to thrive over time.