Which of the following best describes a limited partnership?
Practice Questions
Q1
Which of the following best describes a limited partnership?
All partners have unlimited liability.
Only one partner has unlimited liability.
All partners are involved in management.
Partners share profits equally.
Questions & Step-by-Step Solutions
Which of the following best describes a limited partnership?
Step 1: Understand what a partnership is. A partnership is a business arrangement where two or more people share ownership.
Step 2: Learn about the types of partners in a limited partnership. There are two types: general partners and limited partners.
Step 3: Know that general partners have unlimited liability. This means they are personally responsible for all the debts of the business.
Step 4: Understand that limited partners have limited liability. This means they are only responsible for the business debts up to the amount they invested.
Step 5: Conclude that in a limited partnership, there is at least one general partner with unlimited liability and one or more limited partners with limited liability.
