Which statement is true regarding General Partnerships?

A General Partnership is characterized by the mutual agreement among partners to manage a business and share its profits and losses. In a General Partnership, all partners typically have equal responsibility in the management of the business and share profits and losses based on the terms of their partnership agreement. While some partnerships may agree on differing percentages of profit or loss sharing, it is a general rule that all partners are equally involved and liable, making the sharing of financial outcomes a critical aspect of this structure.

This principle underscores the nature of a General Partnership, where there is no limitation on liability among partners, unlike in limited partnerships or corporations. Therefore, sharing profits and losses is intrinsic to the operation of a General Partnership, reflecting its collaborative and equitable foundation.

The other options reflect attributes of partnerships that do not align with the true nature of General Partnerships. For instance, the concept of limited liability (mentioned in the first option) does not apply here, as all partners are generally liable for the debts and obligations of the partnership. While a General Partnership requires at least two partners for formation, this is a foundational requirement for any partnership model. Dissolving a General Partnership can be straightforward depending on the partnership agreement, but various factors can complicate this process.