Asked by Viktoriia Gervasi on Apr 28, 2024
Verified
In which type of organization do all partners enjoy limited liability in regards to negligence and potential losses limited to their original investment?
A) general partnership
B) REIT
C) sole proprietorship
D) limited liability partnership (LLP)
Limited Liability Partnership (LLP)
A limited liability partnership combines the limited liability advantage of a corporation with the tax advantages of a partnership.
General Partnership
A business arrangement where two or more individuals share ownership, as well as the profits, liabilities, and management duties.
- Understand the features, benefits, and drawbacks of partnerships as opposed to alternative organizational structures.
Verified Answer
KL
Keriann LeBlancMay 03, 2024
Final Answer :
D
Explanation :
In a limited liability partnership (LLP), all partners enjoy limited liability in regards to negligence and potential losses limited to their original investment. This means that their personal assets are protected in case of claims or lawsuits against the business. General partnerships and sole proprietorships do not offer this protection, and REITs are a specific type of real estate investment organization that operates differently from partnerships.
Learning Objectives
- Understand the features, benefits, and drawbacks of partnerships as opposed to alternative organizational structures.
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