Asked by alexis nuara on Jul 04, 2024
Verified
In a limited partnership,limited partners:
A) play an active role in the management of the firm.
B) do not pay federal income tax on their share of the profits.
C) are passive investors.
D) have unlimited liability for the firm's debts.
Limited Partners
Investors in a partnership who have limited liability to the extent of their investment and are not involved in day-to-day management decisions.
Limited Partnership
A partnership where at least one partner has limited liability for the debts of the business, while at least one other has full liability.
- Identify the distinctions between general and limited partnership roles, specifically regarding their management involvement and liability scope.
Verified Answer
AV
Aiyanna VerellaqJul 10, 2024
Final Answer :
C
Explanation :
Limited partners usually have no liability for the obligations of the limited partnership once they have paid their capital contributions to the limited partnership.As a passive investor,a limited partner may use the losses only to offset income from other passive investments.
Learning Objectives
- Identify the distinctions between general and limited partnership roles, specifically regarding their management involvement and liability scope.
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