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Which of the following best describes the term 'limited partner'?

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Question: Which of the following best describes the term \'limited partner\'?

Options:

  1. A partner who has unlimited liability
  2. A partner who contributes capital but has limited involvement in management
  3. A partner who manages the business
  4. A partner who is not liable for any debts

Correct Answer: A partner who contributes capital but has limited involvement in management

Solution: 

A limited partner contributes capital but does not participate in the management of the business.

Which of the following best describes the term 'limited partner'?

Practice Questions

Q1
Which of the following best describes the term 'limited partner'?
  1. A partner who has unlimited liability
  2. A partner who contributes capital but has limited involvement in management
  3. A partner who manages the business
  4. A partner who is not liable for any debts

Questions & Step-by-Step Solutions

Which of the following best describes the term 'limited partner'?
  • Step 1: Understand what a limited partner is. A limited partner is someone who invests money in a business.
  • Step 2: Know that a limited partner does not take part in running or managing the business.
  • Step 3: Remember that limited partners are usually not responsible for the debts of the business beyond their investment.
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