Fundamentals of Surveying (FS) Practice Exam

Which statement is true regarding a partnership?

1. It can sell stocks or shares

2. It exists independently of the people who own and manage it

3. It is the most common type of business

4. It is a business owned by two or more people working for a profit

The correct answer is: It is a business owned by two or more people working for a profit

A partnership is defined as a business structure formed by two or more individuals who agree to operate a business together for profit. This collaborative effort allows partners to share the responsibilities, resources, and liabilities of running the business. While partnerships do have the ability to generate profits and make business decisions collectively, they do not exist independently of their owners; they are directly tied to the individuals in the partnership. The nature of a partnership often emphasizes mutual ownership and operational collaboration, which underlines the importance of the relationship between the partners. Unlike corporations, partnerships do not have the capacity to sell stocks or shares as a means of capital generation; they rely on the contribution and agreement of the partners involved. Moreover, while partnerships are a common form of business organization, it cannot be said that they are the most predominant type compared to sole proprietorships and corporations in many contexts. Thus, the focus on the definition and function of a partnership aligns with the statement about it being a business owned by two or more people working for a profit.