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Economics

Chapter 8 Section 2 “Partnerships”

P.190-193

Section Focus: ___________________________________________________________

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Vocabulary: Partnerships _________________________________________________

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General Partnership ________________________________________

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Limited Partnership ___________________________________________

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Limited Liability Partnership ____________________________________

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Articles of Partnership _________________________________________

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Uniform Partnership Act _______________________________________

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Assets ______________________________________________________

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Notes

As you read Section 2, supply the requested information in the spaces below.

1. Typical examples of partnerships: ____________________________________

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2. What limited partners do and do not ____________________________________

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3. How limited liability partnerships ____________________________________

Compare with general partnerships ____________________________________

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4. Items often covered under articles of ____________________________________

partnerships ____________________________________

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5. Capital and taxation advantages of ____________________________________

partnerships ____________________________________

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6. Liability disadvantages of partnerships ____________________________________

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Complete each sentence by writing the correct term in the blank.

7. Only one partner is required to be a general partner in a ________________________.

8. Money and other valuables make up a firm’s ________________________________.

9. Ownership interests and management responsibilities are legislated under the ________________.

Concept Map

Quiz

Column I Column II

___ 1. a business in which all partners share in both a. limited partnership

responsibility and liability b. limited liability partnership

___ 2. a business in which all partners are limited from c. general partnership

personal liability in certain situations d. Uniform Partnership Act

___ 3. a business in which only one person has unlimited e. articles of partnership

personal liability for the business’s actions

___ 4. a state law that establishes rules for partnerships

___ 5. a legal agreement that sets out each partner’s rights

and responsibilities in a particular partnership

Circle the letter of the correct answer.

6. What percentage of all businesses are partnerships?

a. 2 percent c. 15 percent

b. 7 percent d. 25 percent

7. What is a major advantage of a business that is a partnership rather than a sole proprietorship?

a. The responsibility for the business is shared.

b. The business is easy to start up.

c. The partners are not responsible for the business debts.

d. The business is easy to sell.

8. What is the difference between a limited partnership and a limited liability partnership?

a. In a limited partnership, every partner is responsible for the company’s actions.

b. In a limited partnership, partners cannot lose the money they have invested.

c. In a limited liability partnership, only one partner manages the business.

d. In a limited liability partnership, all partners are limited from liability in some situations.

9. What are assets?

a. suits against a partnership c. money and other valuables

b. absolute control over a company d. taxes that apply to a partnership

10. How is a general partnership organized?

a. Every partner shares equally in both responsibility and liability.

b. The doctors, lawyers, or accountants who form a general partnership hire others to run the partnership.

c. No partner is responsible for the debts of the partnership beyond his or her investment.

d. Only one partner is responsible for the debts of the partnership.

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Disadvantages

Of

Partnerships

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Advantages

Of

Partnerships

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Types

Of

Partnerships

Partnerships

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