Which of the following statements is true about partnerships?

In a partnership, one of the defining features is that all partners typically have unlimited liability. This means that if the partnership incurs debt or faces legal issues, the personal assets of each partner can be at risk to cover the obligations of the business. This characteristic of unlimited liability distinguishes partnerships from corporations, where owners (shareholders) typically enjoy limited liability.

The notion of partners having unlimited liability is crucial as it underscores the personal stakes involved in the business and often influences the decision of individuals considering entering into a partnership. The implication here is that any negligence or malpractice by one partner may have financial repercussions for all partners, encouraging careful management and a strong sense of responsibility among them.

In contrast, the other statements do not accurately depict the nature of partnerships. Partners are not taxed as corporations; instead, partnerships are pass-through entities, meaning the profits and losses are reported on each partner's personal tax return. While it's true that all partners typically have management rights, there are variations depending on the partnership agreement, so it’s not universally true that all can manage the business in every type of partnership. Lastly, partnerships can indeed have investors; there is a structure known as limited partnerships where certain partners can have limited involvement and liability, which allows for investor participation.